Australia's Housing Affordability Crisis

squeeze on 16/04/2023 - 23:02

The average income in Australia is 92K pre-tax. This equates to around 4.7K monthly take-home. To buy an apartment in a desirable suburb in Sydney or Melbourne you are looking at spending AT LEAST $600,000 for something small but liveable (2 bedrooms if you're lucky). The monthly repayments assuming a 500K loan (assuming you have saved 100k deposit) is 3.4K over 30 years (7% interest rate). This leaves 1.3K leftover for body corp fees, car expenses, holidays, food, utilities and life which is not enough to live comfortably.

In other words for a single person to buy their first home without the bank of mum and dad it's really not achievable without making big sacrifices. I wonder where this will leave a generation of low income earners who never make it into the market.

What can be done to address this and get first home buyers / young people into the market?

Personally I think there should be more tax on property investors and restrictions on foreign property investment. In other words - more owner occupied homes. I am interested to see what Labor do with the first home buyer shared equity scheme.

An interesting watch from Friendly Jordies on the housing affordability crisis - https://www.youtube.com/watch?v=lJE3B_ra3lY&ab_channel=frien…

Financial

Comments

        • akashra on 20/04/2023 - 13:02

          We should also get extremely strict about specifying what jobs can be performed remotely. Any job which is capable of being performed remotely should not be eligible for Visa sponsorship with a residential address to be within the bounds of a metropolitan area. But at the same time, it could also be argued that those jobs don't require a person to live locally either.

          Unfortunately, as we saw during the pandemic, managers and companies were dodgy AF with what they labelled "essential" workers to try justify the in-office work culture that they were more comfortable with.

      • UberIsCool on 19/04/2023 - 15:52

        We need to get away from contractors, they don’t do the same quality job as a full time employee

        • Gabbatron44 on 21/04/2023 - 08:47

          You can't say that across the board. It's absolute BS.

  • Pcosmic on 17/04/2023 - 00:35
    +27

    Heard the same thing 10 years ago 😂

    • JIMB0 on 17/04/2023 - 05:02
      +24

      It's the same old story. These people are just hoping and praying for a crash that never comes. At best they'll get a dip. They need to buy something affordable rather than desirable.

      • gromit on 17/04/2023 - 13:17
        +5

        exactly, why does the property have to be in the "desirable" suburb. This is the problem with so many buyers, they over extend to get what they want rather than what they need and can afford

        • Nebargains on 17/04/2023 - 19:10
          +2

          Thought the same thing, op says average income then desirable suburb, sorry you can't have both. I agree, too many prospective buyers don't want to compromise and I completely understand why but it seems like social media wants to be able to live in inner city suburbs on a single average income… Sorry not gonna happen. These same people say they want more supply, ok more houses get built, where are those getting built? On the outskirts where these same people don't want to live.

          I've watched too many people sit on the sidelines complaining only to bite the bullet and pay more than if they just came to this realisation years earlier.

        • UberIsCool on 19/04/2023 - 15:53
          +1

          Cause everyone wants what the other bloke has, the gold standard

        • akashra on 20/04/2023 - 13:05
          +1

          It depends on your definition of 'desirable'. To me this has nothing to do with the actual suburb, but merely the travel distance from the CBD. Why should anyone have to tolerate a 90 minute each-way commute? That's ultimately the problem - the NIMBY attitude of people who were able to buy land in the inner suburbs by virtue of merely being alive during the 1930s to 1970s, and refusing those suburbs to be densely and upward developed.

          It's utterly disgusting that people try to use the comparison and claim that they "worked hard" and "started with a crap job" when the city was 40% of the current population. People starting at the same level they claim to would, today, have to live in Melbourne suburbs like Cranbourne and Wallan when back in the day on the same comparable position they were able to afford in Camberwell or Carnegie.

          • pogichinoy on 20/04/2023 - 23:26

            @akashra: That's the price to pay for living closer to the CBD. Seeing that you're from Melb, you can buy in the West? Deer Park is 30-60 mins drive to the CBD. Yet most folk in Melbourne want to live in the Eastern suburbs, ideally inner East.

            Keep in mind the suburbs today are very different to what they were back then. The inner East would have been considered the outskirts back in the day.

            I do agree with your point about the NIMBY attitude but if you put yourself in their shoes, high density buildings will invite more traffic and potentially ruffians.

      • Name on 17/04/2023 - 21:37
        -2

        I reckon even "affordable" would be difficult to find these days. I'm looking to buy another investment property and nothing seems reasonably priced.

    • afoveht on 17/04/2023 - 10:37
      +2

      Yep, and there's the rub. All this time knowing what's going on, knowing that it will get worse, and yet doing nothing about it.

  • freefall101 on 17/04/2023 - 00:51
    +13

    The reason housing is unaffordable is because people are willing to sink a significant amount of their income and savings into having a nice home. "Desirable suburbs" are always going to be limited and there are plenty of good suburbs outside of those without the bank of mum and dad or dual incomes. Even if supply went up dramatically, it'd be in outer suburbs which tend to be undesirable.

    I dunno about Sydney, but you can get a $400k 2 bedroom apartment in the CBD or some good suburbs (Footscray, Maribyrnong, Preston etc). The government will even cough up 25% of that as their own equity stake (seems like NSW has a similar program too), leaving a 5% deposit to be paid. So someone with $20k can take on a $280k loan and have an apartment to live in.

    Lock it in at a 5 year fixed rate of 6% and it's $1,677 a month payments, with the added bonus that over the next 5 years they won't have to deal with rent increases but hopefully their salary goes up.

    • Jolakot on 17/04/2023 - 11:38
      +11

      Where's this $400k 2 bedroom apartment in Maribyrnong?

      • freefall101 on 17/04/2023 - 12:38

        Sorry, I thought everything north of Ballarat road was Maribyrnong but most of the apartments are in Footscray (not that there's anything wrong with Footscray, but it's not Maribyrnong).

        Can still find things like this, but IMO it'll either go for a lot more than 440k or it's really shit - https://www.realestate.com.au/property-apartment-vic-maribyr…

        There's some stuff to the far west side which isn't too bad but public transport sucks and there's probably a fair bit of airport noise - https://www.realestate.com.au/property-apartment-vic-maribyr…. North would probably be better, with older style units - https://www.realestate.com.au/property-apartment-vic-maribyr…. There's nothing east of the river though (although there's pockets in Moonee Ponds and all those apartments in Travancore. But I lived in one of those, highway noise sucked and there was a chronic problem with bathtubs leaking into the apartment below).

        • Jolakot on 17/04/2023 - 14:05

          That area right under the river actually seems pretty affordable, wish I'd seen these a few years ago when I was looking for something similar

        • Name on 17/04/2023 - 21:45
          +1

          Wow those are some fairly crap places I'd hate to live in. But you're right. They'd be alright to get ahead in - no longer having to pay rent and body Corp would likely be low without any amenities. Would be worried about who your neighbours might be though.

          • Protractor on 19/04/2023 - 09:59
            +1

            @Name: Put public housing amongst the rich suburbs. That will plateau out housing prices

            • GG57 on 19/04/2023 - 10:24

              @Protractor: In Melbourne, it already is / was.
              Toorak, South Melbourne, Richmond, South Yarra….

              • Protractor on 19/04/2023 - 10:36
                +1

                @GG57: Yeah, come to think of it, I can hear the grating teeth.

                ( The shared demography concept needs to be a national one)

        • Jolakot on 17/04/2023 - 14:06

          Actually not too bad

  • EightImmortals on 17/04/2023 - 06:16
    +12

    I'm sure importing another 650,000 immigrants will fix it.
    Jordies had a couple of ideas on this the other day. He's a loony-Labor supporter but I try not to hold that against anyone if they are making good points.

    He touched on supply withholding by developers to maximise their profits and other dirty goings on.

    https://www.youtube.com/watch?v=lJE3B_ra3lY

    • sir-screwball on 17/04/2023 - 11:57
      +12

      "Loony-Labor supporter" - Care to elaborate on that moniker? I don't understand why supporting Labor over LNP makes someone loony. Though I can understand why someone would call Jordies loony, he's certifiable.

      • EightImmortals on 17/04/2023 - 12:30
        +4

        "Loony-Labor supporter" - Care to elaborate on that moniker?

        Sure, that's someone who can only see the fault in one side of the coin but not the other. The notion that there is ANY political solution to our problems, from any party is pretty loony at this point. IMO.

        • sir-screwball on 17/04/2023 - 12:50
          +13

          Well the "loony" then becomes redundant and only serves to paint one side as worse than the other in my opinion.

          We are in a TPP system which means unless we end up in an ideal world (hung parliament, Labor holding minority), we're stuck with one or the other. Demonstrably the LNP serves only the rich and powerful at the cost of the little people. Labor introduces things like Medicare, like superannuation, like stimulus packages paid to people instead of companies, like the carbon tax. LNP introduces things like CGT discounts, refundability of franking credit offsets, stimulus packages paid to companies instead of people, and climate change scams like the direct action plan and other nonsense.

          One is clearly the lesser of two evils. Labor have plenty of bad apples but they pale in comparison to the LNP.

      • Seraphin7 on 17/04/2023 - 12:31
        -2

        Those who idolise Bill Shorten as some sort of messianic saviour of the nation … as is done in the linked clip … lends a lot of evidence towards the "Loony-Labor supporter" moniker.

        • sir-screwball on 17/04/2023 - 12:52
          +7

          Compared to Scomo, Shorten was a messianic saviour. At least he tried to bring about some change for the good of the working class.

          • gromit on 17/04/2023 - 21:28
            -1

            @sir-screwball: I would put them both in the same both (and sink it), thankfully Shorten never got the chance to exercise his inner Hitler.

        • ThithLord on 17/04/2023 - 13:32
          +3

          I'm sure you can elaborate, poorly, on Bill Shorten's shortcomings

          • Seraphin7 on 17/04/2023 - 14:40
            -2

            @ThithLord: No need. These were more than adequately documented by the electorate in 2019.

            • ThithLord on 17/04/2023 - 14:52

              @Seraphin7: lol there we go. Cat is out of the bag. It's all I expected from the type of person who comments:

              lends a lot of evidence towards the "Loony-Labor supporter" moniker.

              [citation sorely needed]

    • bohn on 17/04/2023 - 14:08
      +2

      From federation to 2005 the average net overseas migration was something like 80,000, between 2005 and 2020 it was 235,000.

      Labor seems intent on increasing migration even further. I think we should return to around 100,000 per year.

      • EightImmortals on 17/04/2023 - 14:10
        +3

        I think we should stop all of it until we get our house in order.

        • bohn on 17/04/2023 - 14:12
          +1

          Yeah that would be okay.
          But long-term we are bringing in too many people.

          In 2002 the Intergenerational Report estimated that Australia would reach 26m in 2042. But we got there 20 years early, in part because of massively increased migration.

        • dtc on 17/04/2023 - 17:46

          It was stopped during COVID and look what happened to house prices…

          • EightImmortals on 18/04/2023 - 06:47
            +2

            @dtc: What that tells me then is that we have too many people here already, and factor in all the other stuff that people have mentioned in this regard and you will understand why prices kept going up until they started bumping the interest rates up. I'm not against immigration BTW but we need to have the infrastructure in place to handle it BEFOREHAND. But then what do I know? The politicians are doing such a great job I guess we should leave to it?

          • bohn on 18/04/2023 - 08:07
            +2

            @dtc:

            It was stopped during COVID and look what happened to house prices…

            • extremely low interest rates (people could borrow more)
            • a lot of restrictions with covid, people stuck at home and couldn't travel etc - couldn't spend money
            • stimulus
            • needing more space, WFH, etc etc
            • pay went up , especially if changing job
            • homebuilder stimulus

            Of course they went up.

        • FlyingMiffy on 18/04/2023 - 08:22
          -1

          What happened when immigration was zero during the 3 covid years? House prices went up by 20-30% no?

      • Thaal Sinestro on 18/04/2023 - 07:06

        Zero population growth policy is a good start. For every 1 person that leaves the country, exactly 1 person is allowed in (not their spouse + kids + siblings [with their children]+ parents). For every death that isn't replaced by a birth, 1 can come in. 25 million is a lot of people for a land continent is almost all uninhabitable desert/badlands.

    • Jazzyau1973 on 20/04/2023 - 00:04

      Immigrations create a whole mess. Well done voters

      • EightImmortals on 20/04/2023 - 06:18

        So when do 'voters' get a say in ANYTHING apart from who gets to lord it over us unaccountably for the next 3 years?
        And for the record we were never asked about a preferred immigration strategy or anything else 'government' does.

  • shaybisc on 17/04/2023 - 06:40
    +10

    "Decades of bipartisan support for ‘the market’ to provide necessary housing locked Australians into a system dependent on extraordinary housing inflation to sustain itself until it became unsustainable.

    It has delivered the present catastrophe of soaring rents, unaffordable prices and insufficient building just as population growth is taking off again.

    The last time Australia was in a similar situation of a housing shortage and rapidly growing population, no less a figure than Sir Robert Menzies knew ‘the market’ could not be left to deal with the problem; that it required large-scale government involvement to make housing affordable.

    Dr Cameron Murray – one of the minority of economists thinking outside the real estate lobby’s square – has published a timely reminder that it was public housing that created the Australian Dream.

    It wasn’t the free market that boosted home ownership from 46 per cent to 72 per cent between 1947 and 1966 but direct government intervention."

    https://thenewdaily.com.au/finance/2023/04/12/housing-market…

  • brendanm on 17/04/2023 - 07:14
    +4

    To buy an apartment in a desirable suburb in Sydney or Melbourne

    Wow, it's almost like you won't be able to buy a perfect home in a perfect suburb as your first house. Crazy. That's not an affordability crisis, that's a "not being able to make sacrifices" crisis.

    • orangetrain on 17/04/2023 - 09:51
      +3

      Desirable can also mean low commutes, lots of business, lots of jobs vs 2 hour daily commutes, little business and not much jobs. State governments have always been playing infrastructure catch up while massively bringing people, so every year there's more demand than ever.

      Do you think everyone desires a beach view?

      • brendanm on 17/04/2023 - 10:07
        +3

        Desirable can also mean low commutes, lots of business, lots of jobs vs 2 hour daily commutes, little business and not much jobs

        The same thing applies. Not everyone can have this, there is not that much physical space. If people want these things, they have to pay more, as everyone wants it, it is in demand, and price is higher. I never said anything about the beach.

        Government can't make land from nothing.

        • orangetrain on 17/04/2023 - 10:17
          -2

          Where can they live if they can't afford it?

          Poor people can't make enough money from nothing.

          • brendanm on 17/04/2023 - 10:19
            +4

            @orangetrain:

            Where can they live if they can't afford it?

            Where it's affordable. Contrary to popular opinion, you don't have to live in Sydney or Melbourne to get a job, and it's also much cheaper to live outside of the major cities.

            Poor people can't make enough money from nothing.

            This is a many faceted problem.

      • Nebargains on 17/04/2023 - 19:18
        +1

        Desirable can also mean low commutes, lots of business, lots of jobs

        So basically inner city desirable suburbs lol.

    • xavster on 18/04/2023 - 16:30
      -1

      What's crazy is this single person is buying a 2 bedroom apartment… that can fit 4 people.
      Taking all the housing for his/her single self and leaving 3 other people homeless.

  • capslock on 17/04/2023 - 07:17
    +18

    You lost me at "desirable".

    If the average person can afford to buy in the desirable suburbs then who is going to live in the non desirable suburbs?

    • orangetrain on 17/04/2023 - 13:28
      -5

      My desirable suburb is one that has a lot of people because that means a lot of business competition (lower prices), child care centres (lower prices) and most of all, ease of access to commute to jobs. Instead of public transport I have to get a car or two (in case of breakdowns), travel far which adds a lot of costs (rego/petrol/insurance) but at least I own the roof over my head and spend a lot of time commuting to jobs far away. Bargain?

      Those that are not as lucky as me to afford a faraway home, will live in tents. Bargain?

    • outlander on 17/04/2023 - 13:58
      +7

      Why does there have to be undesirable suburbs?

      Why not have multiple suburbs, each of which is desirable for a different reason to cater to different needs of different people?

      I can understand there being some crappy suburbs, say less than 10%, where the lack of services and increased crime rates are offset by lower costs to buy/rent, but what's the point of a society if 50% (ie the average) of places people have to live in suck?

      • buckethat on 17/04/2023 - 22:06

        Unfortunately we live in reality. If you think you theres no point in society, you're wlecome to leave it and go live in a forest or some baren land. You'll probably quickly realise the point of a society.

  • ForkSnorter on 17/04/2023 - 07:17
    +14

    Ausralia does have a massive housing affordability crisis.

    But I think your perspective is a bit distorted in some respects, and completely wrong in other respects.

    Helping more people get into the property market will only make it worse. It is demand that is driving prices up. Australian housing prices are what they are because that's what Australians are offering to pay for them. More stimulus for first home buyers will just pump more money into the property market, driving up prices.

    When I was in my 20s, none of my friends or acquaintances owned houses or was even thinking of buying a house. We were all just in the share house scene, enjoying life, eating at $10 restaurants once a week, struggling to obtain qualifications and find a decent job. For most of us this continued into our mid-30s or even 40s. We did not complain about this, and thought it was completely normal.

    When I read articles nowadays about 25-year-olds complaining they can't afford the repayments on their 3-bedroom 2-bathroom house, I cannot relate at all. These are people who likely have a $half million loan, or even higher. None of my friends could have conceived of such an extraordinary amount of money in our 20s or 30s. We thought $500 was a lot of money.

    When I scored my first permanent full-time job, I saved like crazy for 10 years, continued to live in a share house, and bought a 1-bedroom apartment at age 40. I paid off the mortgage in 1 year, then sold it for a profit a year later. Then my girlfriend and I bought a house together. We paid half each. We didn't buy beyond our means. We couldn't afford a house in a major capital city and we wouldn't want to, because they're too busy with endless traffic nightmares, air pollution and noise pollution. We bought a tiny, old, 2-bedroom house that we're slowly renovating. We can walk to the beach in 5 minutes, which is something probably only the top 5% of wealthy multimillionaires in Sydney can do. We've already paid off the house because we didn't dream big. We are on lower than average salaries, closest to just above median salary I would say.

    If you can't afford a house in an expensive city, you find a way to make it work by thinking outside the box and by being patient. But assuming you automatically deserve to own a 2-bedroom apartment in the centre of one of the most expensive cities in the world in your 20s is a bit of a distorted thought process in my opinion.

    There are still a lot of cheap properties around Australia. Some of them are nowhere near the middle of a capital city, but are still commutable distance. And some of them are actually in pretty nice areas. If I was starting out now and had a job in Sydney/Melbourne, I'd probably buy a cheap house in a rural area like north QLD or inland mid-north NSW. Rent it out or use it as a holiday house as you slowly renovate it.

    • sir-screwball on 17/04/2023 - 12:03
      +15

      Are you high? You admit there's a housing crisis then you proceed to blame people who want to own a home for what? Wanting to own a home?

      Just because you did things your way does not mean that the young population of all major population hubs in this country should all move out into the sticks to be able to afford a home.. and the other objectively insane option you tabled (buy something elsewhere and rent it) is just adding to the problem even further.

      Australia has a housing crisis because of a massive list of factors that include things such as sustained, decades long tax based incentives that make housing a very attractive investment vehicle, overseas investment, corporate investment, artificially vacancy rates limiting supply, immigration, corruption in local governments in terms of zoning and under the table payments for developers, heaps of different things. Wanting to own a home that isn't in the absolute middle of nowhere, that is nearby to your family etc is normal and should be supported, not derided.

      • ForkSnorter on 17/04/2023 - 12:11
        +4

        hey, I agree with you that there is an affordability crisis, and I would love the government to end the middle-class welfare known as "negative gearing" and "CGT discount", which is heavily skewed towards wealthy people, and encourages investment in the limited stock of existing properties.

        But if the government gave everyone in their 20s enough stimulus to buy in the most expensive inner areas of 2 of the most expensive cities in the world (Melbourne and Sydney), this would do nothing to make houses more affordable, in fact quite the opposite. It is partly the overwhelming demand for houses, where everyone expects to own a house by 30 (and half of them want to own 2 or more properties) that is driving up prices.

        If everyone took my approach of living in a share house until 40, then buying a modest property with mostly cash, there would be no housing affordability crisis.

        If your family lives in a wealthy area, does that automatically mean you deserve a house in the same area, while poorer people out in the sticks don't?

        • sir-screwball on 17/04/2023 - 12:59
          +15

          Living in a share house until you're 40 is not a solution to any issues. Anyone who wants to have a child can't live in a share house, at least not without annoying a lot of other people.

          Living in a share house is reasonable up til the age of approximately 27ish. After that you're a grown adult and should be seeking your own space in the world.

          As I've pointed out, the issue in this country is multifaceted and under supply is one of them. If housing was predominantly an owner-occupier venture and strict limits were placed on renting out (making the profit margins MUCH more moderate) there'd be a far more controlled market.

          Restrict foreign and corporate ownership. Introduce vacancy taxes that heavily penalise artificial vacancies. Abolish negative gearing. Abolish the CGT discount system. Restrict rental growth beyond CPI. Reward long term tenancies.

          Not everyone wants to own, or is in a position to own a property and as such, there will ALWAYS be a rental market. Just make it less exploitable.

          And no, if your family lives in a wealthy area you don't deserve a home in the same area but you should be able to buy a place within a reasonable distance. If you go to the richest places in Australia, a 30 minute drive can plonk you in many areas that are far cheaper so the logic stands on its own.

          • FlyingMiffy on 18/04/2023 - 08:33
            +2

            @sir-screwball: Mate, the difference is that @ForkSnorter sees it as a problem solvable by making choices. Yours is a problem that somebody else or everybody else needs to solve for you. My first home was an apartment that i paid 250K for on a 52K salary in a "undesireable" suburb. Onwards and upwards from there. The long commutes, the 2 min noodles, the dollar bags of veggies at 5PM that nobody wants was tough but i made it work.

            • outlander on 18/04/2023 - 09:51

              @FlyingMiffy: Some problems are too big to be solved by individual choices.

              If everyone individually chooses the best thing for themselves, yes a few people come out on top, and those people will preach that its possible to defy the odds, but on the whole everyone is worse.

              Whereas if you elect a government willing to lead, and everyone makes a small adjustment, the results can be wildly better.

            • sir-screwball on 18/04/2023 - 20:52

              @FlyingMiffy: The homeless people in the tent cities don't care about how hard you worked. Not that long ago people bought houses that suited their lifestyle, they didn't beg, borrow and steal their way into the worst house in the worst suburb just so they could commence the grind to get a slightly better house.

              Don't you look at how hard you had to work to get into a house and lament that part of your life at all? I am a home owner and I did similar things and I hated how hard it was and I don't feel fulfilled for having done it. I feel like I played the stupid game forced upon me by greedy people and I feel bad for those who aren't able to play it the way I did. I don't feel like it should be THIS hard. I have a son and unless I help him significantly, the way things are going he'll be renting for life even if he plays the game. The game is becoming impossible for new players. That is the problem.

    • Canberralad92 on 18/04/2023 - 08:08
      +2

      Paid off the mortgage in one year? You selling drugs or win the lotto or something?

      • ForkSnorter on 18/04/2023 - 08:18
        +1

        That is easily achievable if you save up a decent deposit and buy a modest property. Not everyone has bought into the demented Australian culture of buying a $900k property with a $180k deposit, where you end up being a debt slave for decades and dish out $400k in interest to the bank, which you're never getting back.

        • Canberralad92 on 18/04/2023 - 09:43

          If you could pay your mortgage off in one year, why not just save for another year and buy with cash? Did you borrow at an crazy low LTV? I thought banks didn't like lending money in those circumstances. Sorry if my questions are silly :P

          • ForkSnorter on 18/04/2023 - 09:58

            @Canberralad92: I saved until I found the property I wanted, that I thought was a reasonable price and could be paid off quickly without incurring too much interest. If I had waited one more year, that property would not have been on the market anymore.

            Actually that is incorrect what you thought about banks. Banks like low risk loans.

          • JIMB0 on 18/04/2023 - 11:12

            @Canberralad92: Maybe they were just waiting until a term deposit matured or didn't want to be cashed strapped by spending all their money on the house. Banks have no problem lending such a small amount on a house.

      • Protractor on 19/04/2023 - 20:15

        Yeah not buying it. This is a dream scenario. (literally)

  • mskeggs on 17/04/2023 - 07:35
    +8

    Sure housing is very costly, but in your example things are set up to fail.
    You have a single person needing a 2br place in a desirable area as their first home?
    Why is that?
    My first home when I was married was only a 1br.
    Even in Sydney you can buy a unit today around Parramatta for $350k, hardly the ghetto.

    I agree Australia spends too much on housing, but you do your argument a disservice if you repeat the issues that got us here, of demanding bigger houses than necessary and refusing to live anywhere except “desirable” locations.

    • UberIsCool on 19/04/2023 - 15:59

      Over 55sqm? I looked two years ago in Parra and nothing for this price

      • mskeggs on 19/04/2023 - 16:05

        I just did a search on realestate.com.au, but I'd suggest prices are lower than 2 years ago.

        • UberIsCool on 19/04/2023 - 16:06

          Think you’ll find unit have not dropped in price. Over 55sqm units are hard to get as banks won’t loan for anything under. I saw some nice places around 40sqm (remember garages, terraces, balconies and outdoor spaces don’t count in sqm) for $350k with very high strata

          Edit: just did a search on domain and nothing

          • mskeggs on 19/04/2023 - 17:05

            @UberIsCool: I think we're probably talking about different things. I was commenting on cheap first home buyer units.
            The ones I saw were mainly 1960s and 1970s brick 3 story blocks.
            No costly facilities etc.

            Addresses in Granville, Harris Park, Auburn, Merrylands. Not new highrise.
            Prices from $330-$400k.

            I didn't know about the 50m2 rule. It used to be 30m2.
            I think our 1br apartment was only about 40m2, but it did have 2 balconies.
            Must make it hard to get finance for 1br places.

            • UberIsCool on 19/04/2023 - 17:28

              @mskeggs: Yeah was hard if you want a loan from a big 4 bank. I think other brokers may lend for smaller places but the big 4 was about risk, smaller places are riskier but surely that’ll change given how hard it is to get one

  • Sinnerator on 17/04/2023 - 08:13
    +3

    That $92K is heavily skewed by the rich.
    What is income range of the bottom 50% ?
    You will find there are a lot of people in the $50K to $60K per year bracket, and they will, no matter how much they sacrifice, never afford to buy.

    • Herbse on 17/04/2023 - 15:56
      +1

      People always use the "average income is $92k" statistic. But that's actually the median income

      As you said, skewed by few people who make much more than $92k. And there are a tonne more people who make much less than $92k

      • dtc on 17/04/2023 - 17:53

        There are 14.7m taxpayers in Australia. The average is not skewed by a few people who 'make much more than $92k', there just arent enough of them to skew 14.7m data points

        The average is skewed by a lot of people earning $120 - 200k, which does drive up the average and means there are plenty earning less than $92k. Maybe you see those people as making 'much more' than $92k?

        The median FTE male earnings figure is actually around $83k pa ($1600 pw) and women is $75k. But put those two together as a couple and you have $157k on average. Which isnt a terrible income to afford a house.

        In August 2022,

        25% of all employees earned less than $800 per week in their main job (25th percentile)
        50% of all employees earned less than $1,250 (50th percentile/median)
        (average is $1600 pw, so between 50th and 75th percentil)
        75% of all employees earned less than $1,900 (75th percentile)
        90% of all employees earned less than $2,720 (90th percentile)

        (https://www.abs.gov.au/statistics/labour/earnings-and-workin…)

      • buckethat on 17/04/2023 - 22:08
        +3

        I think you've got median and average/mean confused bud.

  • DarkOz on 17/04/2023 - 08:16
    +8

    single person
    desirable suburb in Sydney or Melbourne
    without making big sacrifices

    Work harder, maybe double income (work 2 jobs or get a partner) or even triple income.

    Everyone wants a desirable suburb, if you can't afford it then try something less desirable. Your example of $600k 2 bedroom unit is a joke. There are plenty around for $300-$400K.

    Paying off a mortgage is one of the biggest sacrifices in life. You don't want to make big sacrifices? Go rent.

    Nothing will be done about affordable housing. This is actually what the government wanted. It's working perfectly as designed.

  • 87percent on 17/04/2023 - 08:26
    +3

    Anyone see this? https://imgur.com/rQmBMF5

    Greenacre
    RENOVATE AND RENT
    3 bedroom family home perfect for the growing family, nestled in a quiet vet convenient location being close to all the wonderful amenities such as transport, parks, schools, shops in need of a renovation.
    Please READ the below in full before you send inquiry or call
    WHATS THE CATCH
    On offer is a 3 bedroom property with dual access for rent in need of a renovation.
    Property is currently uninhabitable work is required before moving in
    The landlord does not have the funds to renovate the property.
    Opportunity for a savvy minded person or persons with trade knowledge and experience.
    The successful tenant to pay for the full renovation at their own expense in return, the landlord offers the following:
    1. 3 Year Lease
    2. First Year Rent Free Period to cover the renovation.
    3. Second and third year $650 per week - Negotiable

    • brendanm on 17/04/2023 - 08:38

      Hahah surely that's a joke. $80k Reno and free labour, but one year free rent?

    • Ryanek on 17/04/2023 - 08:40

      Ridiculous

    • KaTst3R on 17/04/2023 - 09:55
      +3

      Technically, the lease agreement cannot be signed as the house does not meet NSW minimum standards for rental as it is inhabitable and unsafe. There is a lot of risk for the renter as once the work is done and lease is to be signed, the owner can turn around and refuse to complete the contract.

  • GordonD on 17/04/2023 - 08:42
    -1

    The politicians don't rush to fix the housing and rental affordability crisis because they don't know how to. The answer is not obvious, easy, or simple.

    The politicians rely on economists for matters like this. And economists don't know how to fix them. Economists have a reasonably good idea what the primary effect will be if they push one of the economic levers in one direction or the other. But they have no idea how far to push it in any given circumstance. They just see what happens, and adjust their response accordingly. And the whole economy is just too complex for them to have any idea what secondary and tertiary effects there will be. They are good at telling us afterwards why something happened, but terrible at predicting what will happen.

    We simply put too much power in economists hands. Arguably most of our problems today are the result of what they told the politicians to do yesterday. For example the current rental crisis is the direct result of what the economists told the politicians to do when the doctors told the politicians to shut down the economy to save us from covid. They lowered interest rates to near zero and handed out a lot of money, and prompted a lot of people to decide it was time to buy a house of their own. With houses taking a long time to build that meant a lot of rental properties were sold, now there aren't enough. And building companies are going broke because the big increase in home building pushes material and labour costs up.

    I wonder if economists do more harm than good.

    • scotty on 17/04/2023 - 09:40
      +2

      I probably won't conclude that economists do more harm than good, but I do agree that the issue is — they simply don't know what can be done, consider how complex the whole economical system is (source: a friend who did PhD in the US and now doing post-doc work with economists focusing on government policy). Whatever policy you push out there's always undesirable side effect.

      However these days it's just popular to blame the politicians for lack of action "because they all own IPs".

    • ShoeJunkie on 17/04/2023 - 09:47

      Off topic, relatively speaking.

      However to answer your final comment. I don't know, here is an economists take on the whole thing.

      How Economists Invented Austerity

  • Seraphin7 on 17/04/2023 - 09:24

    The average income in Australia is 92K pre-tax. This equates to around 4.7K monthly take-home.

    The tax on this is ~$20k, meaning the take home is closer to $6k per month. This changes the equation significantly in the context of a monthly mortgage of $3.4k.

    • MantistobogganMD on 17/04/2023 - 11:42

      I don't think you're correct.

      92k pre tax means they will pay about 17,465 in tax…so take home would be 5,065 a month

      • Seraphin7 on 17/04/2023 - 12:12

        If your take home pay is $72k annually (i.e. $92k gross less $20k tax), then your monthly take home is $6k by basic division.

        • MantistobogganMD on 17/04/2023 - 12:47
          +2

          ah i was assuming super was included in the 92k package

  • holoz0r on 17/04/2023 - 09:29

    It isnt a crisis. It is poor planning.

  • Bargainitis on 17/04/2023 - 09:34
    +1

    Here we go again…. every week we have the same thread.

    I'm ready for the downvotes for this post.

    Wanna live in a nice suburb? make more money. Otherwise, you live within your means which means further out of CBD. You can also rent which means you don't need a big deposit or a significant salary if being in a nice suburb is important.

    Otherwise, you could buy a house on a big block of land in western sydney for under $1m. Sure it might be less convenient but it is what it is.

    As all low to middle class have learnt (or still learning), its hard to overthrow "old money". The construct of a social ladder / pyramid means there is inevitably differences - we simply can't all live in the nicest places.

    If you are smart and hard working, you might be able to break through but if not, accept your fate - I have.

    • techlead on 17/04/2023 - 11:33
      +3

      Are you Joe Hockey? You sound exactly like Joe Hockey lmao

      "The starting point for a first home buyer is to get a good job that pays good money. If you've got a good job and it pays good money and you have security in relation to that job, then you can go to the bank and you can borrow money and that's readily affordable"

      Why don't poor people just get more money? There you go, problem solved.

      • OzHan on 17/04/2023 - 12:04
        -1

        Joe Hockey was speaking the truth not many want to hear. The starting point for a first home buyer is to get a good job that pays good money. can you really fault his statement.

        • techlead on 17/04/2023 - 12:08
          +2

          can you really fault his statement.

          Of course we can, Joe Hockey is ignoring the root of the problem, which is the incentives/loopholes in the system has created inequality where its quite different for someone to get on the first rung of the ladder.

          Get a good job that pays good money is not a solution. Its not going to do anything when the median house price is over $1.2 mil in NSW.

          Also, its vicious cycle, $1 mil for one person is good for that person, $1 mil for everyone is good for no one, its basic economics. Inflation will go through the roof, pushing up asset prices even more.

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