Is Housing Affordability Really a Problem?

Why not just rent? Isn't it common in other countries for years and it is never a problem?

Edit:
Thank you all for your reply. I think it is now clear that it is not a problem.

closed Comments

  • it is for people that dont want to move out of million dollar house cities.

    • Agreed. Looking at real estate listings in cheaper places makes me realise I can feel very well off in many places in Australia. Just not Sydney or Melbourne for a start.

      • It's a Catch-22 — if you lived in a cheaper city/town, your job probably wouldn't pay as much either. Unless your job can be done remotely.

        • If you could get your work done remotely, then wouldnt' that lower land value in Sydney and Melbourne? If you own land in either of those cities, then you should probably be campaigning hard against the NBN, so people can't just live anywhere and still work for any major firm in those cities. NBN will cost some people money they felt they were entitled to.

    • Lol. I live in a town of 40,000 people house prices are still high.

    • lol at all the downvotes 😂 gl paying 600k for a tin shed.

  • Landlord and tenant law is Australia is much more pro landlord than in most developed nations.

    • Lol

    • -24 votes

      I beg to disagree. If you see the rules against the bond claims, it's absolutely in tenant favor.

    • Have you lived abroad?

    • You've got to be kidding?

    • Getting upvotes as most on OzBargain are renters for life…the savers mentality not really working that well…

    • In what way more pro landlord?

    • So very true. And political parties want to keep it this way so it encourages ownership, therefore less burden on public housing and eventually less people on the pension.

    • So very not true. In terms of evictions, maybe. A landlord should have the right to pick and choose who lives in their property. But in a broader sense, absolutely not, it is so much pro tenant.
      Potentially tenants could for example-
      1. Not pay rent for periods of up to 6 months while the landlord is tied up in the courts for an eviction.
      2. Leave the premises in practically any state they wish, requiring possibly tens of thousands of dollars in repair, without any repercussions.
      There is a reason why there is an industry blacklisting register for tenants. Landlords can be financially ruined.
      The point is, if a tenant wants to be an ass, they can be. Legal options for the landlord are practically non-existent.

      • Looks there are pros and cons on each side. I've rented places where even a mention of asking for holes in the flooring to be repaired has been responded to with threats of being put on a blacklist and never being able to rent in NSW again. No grounds evictions on the owners side, whereas if the tenant wants to leave they have to pay the rest of the lease if a replacement can't be found. I would say "if an owner wants to be an ass, they can be. Legal options for the tenant are practically non existent".

        On the other hand, are there nightmare tenants who will not pay rent, destroy the property and disappear, with no meaningful assets to get back from them? I'm sure there are. Which is where a real estate or owner should vet the prospective tenants carefully.

        I've lived in a few other countries and its a bit of a mixed bag. In one its rent up front for a year and then you have no ability to get anything done. In another, it was more like European countries where rights are much heavier in renters favour than here. (3 month notice vacation with no other obligations, lease is basically permanent, eviction is only possible in limited circumstances).

      • @bigticket, land owners shouldn't really be able to discriminate between tenants because they don't own the land. It still belongs to the state. And if things don't start to change we're gonna take it back.

    • Unfortunately the politicians are land owners, mine owners, poluters, and are happy to destroy the planet for their $$$

  • +16 votes

    It depends.

    The cost of housing in many countries, Australia included, will rise to the max level of affordability.

    If everyone got a pay rise tomorrow, the house price will increase. Conversely, if everyone got a pay cut tomorrow, the house price drops.

    It will not be a proportional increase or decrease as the house and land has an equity value attached as well. Buying a million dollar house doesn't mean spending a million dollars. You can likely get a million dollars for it should you liquidate at any point.

    It is a far more complex issue than a price tag.

    • -9 votes

      I agree. It is normal for housing to increase. It is one of the most demanded asset.

      • Not really. It is just supply and demand. There have been heaps of immigrants and international students for the last 20years or so, which has driven up property.
        In international markets with low population growth/falls, property declines in value or grows very slowly. Look at regional Japan or Italy, or the USA outside of a handful of tier one cities.

        The “in demand” real estate is in limited locations globally, and few are as expensive as Australia.

        • with COVID closing international borders for Australia, does that mean in the next few years there will be a significant reduction in immigrants and international students. That will be a drop in demand and thus prices?

          • @nightqueen: If you look you can see it happening. Rents are falling like a tonne of bricks. Apartment investors are selling or gambling all that international students will return in February.
            I don’t subscribe to price crash theories, but it seems likely to me that some of the properties that soared quickly to high prices will slump 20% or more.
            This probably means something like a 7% decline across the market, but some places will be less, and some more.

            • @mskeggs: with the growing work from home culture, there might be a shift from inner city apartments/high density living to more people wanting more space, a home office in the outer suburbs or even regional locations that have fast NBN.

        • Yo things aside, I like your dp man. It's good to see your comments.

    • When some one bought a house for 200k in the 90’s taking out an interest based loan (for example)
      At completion of the loan the buyer would’ve paid 400k (money out of pocket)

      Come time to sell, the owner won’t sell the house for 300k knowing full well they’ll be down 100k. Keeping in mind the next place of living they want to buy is also being sold by someone in a similar boat.

      You might come back and say supply v demand, however at this point, the owner can conformably live in the paid off home without a real necessity to leave (think upgrade, downsize, growing family etc) so he is in a position of power to not budge on the asking price (again remembering that everyone else is selling at similar figures)

      Now consider the new-to-the-market buyer, seeing artificially inflated homes at 400k, the bank is willing to cover this figure and get the buyer in on a 30 year loan. The cycle continues and we hit 800k very soon.

      Banks win, they can seize the properties upon default and STILL make money (if not more money than when organically completing the loan)

      The huge issue comes when we face declines in the economy (like now)
      We still need roofs over our heads, but we also need movement and money circulation to employ people and allow business to thrive.

      Banks making money off money and putting people into oppressive markets by their own design is unfortunately the norm, but you cannot deny it is wrong.
      If you deny it is wrong then you’re lack empathy for the people, I dare say probably in a healthy financial situation due to the “system”. Being concerned with the success of people and not following the dollarism cult is more honourable.

      • So are you going to sell your house for hundreds of thousands below market value?

      • When some one bought a house for 200k in the 90’s taking out an interest based loan (for example)
        At completion of the loan the buyer would’ve paid 400k (money out of pocket)

        So house price doubling does not necessarily mean home owner made any profit?

    • Are pays rising? how much has inflation increased vs wages? houses are debts more than assets. I guess unless dady warbucks bought it for you.

  • It can't be a good thing to let society slowly separate itself, with rich people living near somewhere and everyone else living everywhere else. Cities should have a certain percentage of rent controlled properties, affordable tower blocks in prime locations, etc. to help balance out the divide. Just being born into a rich suburb gives you a big advantage over being born into a poorer one, even if your parents are just as poor just being in the rich suburb gives you an advantage. Why should that advantage only go to the children of rich parents, what kind of society is that. Kids of rich parents and kids of poor parents are no different to each other, switch them at birth and parents won't even notice most of the time.

    • Artificially forcing people to behave or do certain things only creates tension. As soon as a loophole is discovered or the law is overturned, the behaviour changes and often becomes much worse than if the law has never intervened.

      If the workers lived in one area, the facilities and businesses would be much easier to tailor to the demographics. This means more successful business which will pull the entire population up, albeit slowly.

      Forcing the the rich to accommodate the poor creates resentment. The first analogy that comes to mind is a poor family scraping their savings together to send their kid to a prestigious school. The kid is an outcast, they can't afford the extra curricular activities and they will not benefit from the main reason for prestige schools, networking.

      Conversely, I am not suggesting we force the poor to congregate.

      People will just move around and find a sweet spot.

      • Why would living near people richer than you cause tension? And don't rich areas still need low income jobs, who is cleaning their stores, making their coffees, scrubbing their toilets?

        • Why would living near people richer than you cause tension?

          Cause you are proposing that the government impose a rent limit, etc.

          What if I said you can only earn $15 an hour from your job. No more. You'd be pissed too.

          Just like dictating the returns on a property investment, dictating the returns on your time investment is just as unfair.

          And don't rich areas still need low income jobs, who is cleaning their stores, making their coffees, scrubbing their toilets?

          It's called transport.

          • @tshow: Until very recently there was a lot of public housing in Miller’s Point in inner Sydney, behind the Rocks.
            It kept prices sensible in some of the pubs, and generally a mix of sandwich shops/take aways etc.
            Now they were all sold for millions and there is no affordable food or drink options, just tourist prices.
            A mixed demographic helped keep the place more livable even for the richer neighbours.

            • @mskeggs:

              A mixed demographic helped keep the place more livable even for the richer neighbours.

              yea, im feeling for those rich folks who can't get cheap sandwiches anymore now lol /s

            • @mskeggs: The rich people can pay more for their food and drink. If they don't like it, they can lower the rent of their investment property without being forced to.

          • @tshow:

            What if I said you can only earn $15 an hour from your job

            Lots of government jobs basically have this. e.g. teachers, medical workers, soldiers.

          • @tshow:

            What if I said you can only earn $15 an hour from your job. No more. You'd be pissed too.

            we already do this when it comes to electricity don't we? tightly regulated. Why is this different?

            I agree traditional rent control is a poor strategy but they way things are working now is untenable.

            the "market" isn't natural with things like negative gearing distorting it, just like every other market. But its in the favor of wealthier people

            • @creamandpaper:

              we already do this when it comes to electricity don't we? tightly regulated. Why is this different?

              Power is regulated because it was originally state owned and sold on certain conditions. It is also a natural monopoly.

              Housing falls into neither concepts above.

              the "market" isn't natural with things like negative gearing distorting it, just like every other market. But its in the favor of wealthier people

              I'm on the fence on negative gearing. It definitely helps the wealthy get richer but it also creates value. Value is not a zero sum game. The rich bankrolling development creates jobs for the working class.

              If we halt negative gearing, the rich may stop getting richer but the poor may end up unemployed and lack of development may reduce supply of housing.

              Of course, when the rich get richer, they tend to also buy up said housing.

              No easy answers but most of the time, when the masses want to spite "the rich", they end up shooting themselves in the foot (for which they will also blame the rich).

      • Forcing the the rich to accommodate the poor creates resentment. The first analogy that comes to mind is a poor family scraping their savings together to send their kid to a prestigious school. The kid is an outcast, they can't afford the extra curricular activities and they will not benefit from the main reason for prestige schools, networking.

        Not true. Analysis has time and again borne out the benefits of mixed class suburbs for both wealthy and poor alike. People with money aren't going to leave Redfern, Bondi, Woolloomooloo, Kings Cross/Potts Point, Darlinghurst etc because residences there are inherently limited and very valuable due to CBD proximity. Having housing commission in those suburbs ensures a better mix of incomes than going hands off and letting wealthy property barons come in and build mcmansions.

        Doing this any other way creates crap suburbs like the few spots around Mt Druitt, where you're too far from opportunity to really get anywhere and cyclic poverty festers.

        • Analysis has time and again borne out the benefits of mixed class suburbs for both wealthy and poor alike.

          So the rich "segregating" themselves is really bad for them. Oh no, let's do them a favour and force them to have poorer people around at their expense. They will be so much better off.

          Poor financial elites. They've been disadvantaged this whole time and they didn't even know it.

    • -3 votes

      It is the way it works. Based on your theory, we should give housing to the poor people in Africa, and we move there.

      • We do take in some people from Africa and provide them with housing. We are a rich country with a low birth growth rate, so we really should be spreading the love at least a little bit, even a token amount.

        • -9 votes

          We don't just take, it's called refugee. They need help, we give them.

          And I said swap, how about you move there and give up your home to one of the refugees?

    • -21 votes

      Why should that advantage only go to the children of rich parents

      Because they're the only ones who worked hard enough for it.

      what kind of society is that.

      One where you only get out what what you put in. I can unserstand giving the poor a participation trophy to live a reasonable lifestyle while facing hard times, but there's this strange new trend of giving the poor 1st prize just for participating. 1 free ride to the top of the upper class in Bondi thanks. Windows seat please.

      • The children worked hard for it?

        What did these children put in that made them deserve the advantage of growing up in a rich area. Kids are equally useless, rich or poor alike. I don't think they can even legally work even if you wanted them to.

              • @DisabledUser225214: I just think everyone should have the opportunity to get the same amount of sauce out of the bottle as other kids. Do rich kids really need a huge plate full of sauce while the majority of other kids just get watery spray droplets when it's their turn for a squeeze?

                • @AustriaBargain: So it's unfair that the (rich) parent worked extra hard, so they can give their kids their own bottle of sauce?

                  It's not a birthright to be entitled to inheritance. But it's the parents right to choose where it goes. You feel like you have or other people have a right to right to someone else's sauce?

                • -1 vote

                  @AustriaBargain: And that is communism. Saying yes next time would do fine.

        • No, the parents worked hard for it, and they have a right to spend their money however they please.

          Part of the reason rich areas are so rich is because all the rich people want to move into safe, clean, and low-crime areas. You want to put masses of the lower class in Bondi or Vaclause so they can enjoy a harbourside view on the taxpayer's dime? No thanks. The only thing that will happen is the poor people will eventually take over as they tend to have a lot more kids than the upper class, and in a few decades you've just got yourself another ghetto.

          • @SlavOz: So rich kids should get the good life and other Australian kids shouldn’t, merely because their parents are rich? And all the poor workers should have to make long commutes to get into the rich areas to work? Sounds very bleak. How would you convince the majority of voters that it’s in their best interests to live as second class citizens in their own country.

            • @AustriaBargain: Are you talking about Australia or some third world country? Is the definition of a good life being able to live in a mansion, drive a BMW etc? Those poor kids driving a Toyota must have it tough.

              You probably earn more than me, it's not fair you have a ps4 and I don't. You should give it to me.

              • @Ughhh: You're welcome to come to my place and play my PS4 with me. I agree that it's unfair that I can afford one and you can't. You have to wash your hands first though.

                • @AustriaBargain: It's not fair you get to play whenever you want though. You should buy me and every other poor kid one.

                  Also not fair you have a car, you should give me yours. I'll take your nice phone too. Thanks

                • -2 votes

                  @AustriaBargain: My friend, don't be a hypocrite, share a post on ozbargain with your address, titles, free ps4 trial for those that do not have one. That's fair.