Will Housing Affordability Improve in Australia?

squeeze on 02/10/2024 - 23:36
Last edited 03/10/2024 - 11:14 by 1 other user

I feel I'm not alone in being really frustrated with the state of housing affordability.

For context I am late 20s with a partner, financially savvy, have a good income and savings yet home ownership is almost entirely out of reach. That is - without making drastic life changes that would significantly reduce quality of life (eg. living in a run-down shoebox or moving to undesirable areas with are significantly further from work, family, friends etc).

In other words- what I can afford now is simply not worth being drowned in debt for the next 30-years, I would rather continue to rent in shared housing or do something more radical like move internationally. For most younger people the cost of living pressures have only pushed the concept of home ownership further into the category of 'never going to happen' unless you are lucky enough to get a large inheritance or hit Tattslotto.

I would like to gauge the wider OzBargain community thoughts on WILL THE STATE OF AFFORDABLE HOUSING IMPROVE IN AUSTRALIA

Believe that as a country we need to strip incentives that make investing in housing so lucrative for already wealthy investors, find ways of increasing housing supply and fundamentally change the perception of housing as investments but as shelter.

Poll Options

  • 23
    Yes - Housing Affordability will Improve
  • 675
    No - Housing Affordability will continue to get worse
  • 62
    The situation will stay more or less the same
Financial

Comments

  • overthinking on 03/10/2024 - 14:43
    -1

    lmao that yes/no ratio

    sheeeeeeesh

    op just buy a property and enjoy your capital growth

    • joka on 03/10/2024 - 15:08
      +1

      Not sure why people negged you. Yes, buy an investment property you can afford at a young age, sit on it, take advantage of the tax system, wait for the value to rise, get some capital against it, and then use it as security to buy your 'dream' home. That's how you make the system work for you. Waiting for the prices to fall or the government to 'help' you will mean you will never buy a house.

  • Benoffie on 03/10/2024 - 15:06

    Cant run a Big Australia policy and have huge levels of immigration and hope for magical changes to fundamentals in supply chains and outputs.

    Any changes in tax or duties is politicking.

  • hasher22 on 03/10/2024 - 16:35

    Nope…. throwing money isn't fixing the problem. And nothing is done about the CORE problems….

  • gromit on 03/10/2024 - 16:50

    It really depends on if we ever get a government willing to do the hard work in fixing it. So far neither Labor nor the Coalition and ESPECIALLY not the greens have any intention of fixing it, they all point at and blame symptoms rather than actually fixing the core problems which are supply, the costs, the red tape and land release issues that strangle supply barely get a look in, instead you just have them pointing fingers at banks, immigration, CGT and negative gearing, infrastructure etc etc, all of which are symptoms not the problem.

    my bet is it won't be fixed anytime soon.

  • sunnyii on 03/10/2024 - 17:35

    If property prices drop by 30%, you may not be able to afford a loan, especially if you lose your job. Even if you remain employed, the bank's risk assessment may limit the amount you can borrow unless you have a million dollars in your bank account.

    • AustriaBargain on 03/10/2024 - 17:39

      Are you suggesting banks won't lend first homeowners money to buy a house if the bank believes house values will go down instead of up?

      • gromit on 03/10/2024 - 17:42

        They will want substantially more security if prices are headed downward. Banks are a business not a charity.

        • AustriaBargain on 03/10/2024 - 21:19

          If only it were possible to make money "shorting" a house, like you can short trade a share. Investors would have an incentive for driving house prices down.

          • gromit on 03/10/2024 - 22:13

            @AustriaBargain: The thing about a short, for them to make money someone else has to lose. With shorting the loser is the one that owns the asset, i.e. the poor house owner or first home buyer.

            • AustriaBargain on 03/10/2024 - 23:06

              @gromit: I guess houses can be split like shares, once or twice anyway a large lot can be carved into smaller lots.

  • rogerwilko on 03/10/2024 - 17:58

    You never know when famine, war or a pandemic will hit.

  • Gdsamp on 03/10/2024 - 19:26

    Nothing ever happens

  • Some Human on 03/10/2024 - 19:47
    +10

    I recently interacted with a young bunnings employee who told me he had just started his shift there after working all day as an apprentice sparky. He also runs a landscaping business on the weekend. Dude hopes to buy a house by 20.
    Instead of whinging and whining about affordability, he is out there doing everything he can to better his situation.
    This guy is my hero.
    Be like this guy.

    • TEER3X on 03/10/2024 - 21:20

      How to be 20 when you is really old?

      • joka on 04/10/2024 - 07:24
        +7

        The people who didn’t have ambition at a young age are paying for it now. Why is that the governments or the landlords problem?

        • TEER3X on 04/10/2024 - 21:14
          +1

          Gotta blame someone

        • Talsek on 05/10/2024 - 10:07

          Do you need to ‘have ambition’ and be a hustler when you’re young to afford housing..?

          To be honestly I’m pretty sure the average person doesn’t have that much ambition so.. would this mean the average person doesn’t deserve to own their place?

        • t_c on 06/10/2024 - 16:39

          Scott Rush had ambition at a young age too.

      • pogichinoy on 05/10/2024 - 15:18
        +2

        Missed the chance. Next time don’t fumble life without a plan.

    • ssfps on 05/10/2024 - 02:08
      +3

      hopes to buy a house by 20.

      dude is working 3 jobs and doesn't even have his own house?

      my tradie mates all owned their own homes by 18 25 years ago. guess even the hustlers are losing out big time.

    • JIMB0 on 05/10/2024 - 20:13
      +1

      It's a case of the haves and could haves.

  • hmy on 03/10/2024 - 20:40
    +12

    Australia doesn't have a housing affordability problem. It has an expectation problem.

    Everyone wants a house on a 500sqm block with 3+ bedrooms, all within 15km of the CBD. But there's only a finite amount of land, and with a growing population, prices will inevitably rise. Simple supply(finite)-demand(increasing) effect.

    Sorry to burst the bubble of the "Australian dream," but the idea that everyone has this inherent "right" to live in a house with land is simply not realistic.

    If you search on Domain or Realestate.com.au, you'll find plenty of 2-bedroom apartments or units in the $500k-$600k range. The issue here is that what you "can afford now is simply not worth being drowned in debt for the next 30-years". Because, you think you have this inherent "right" to live in a modern house with a land in a "decent" area.

    Australia doesn’t have a housing affordability problem. It has an expectation problem.

    • AustriaBargain on 03/10/2024 - 21:20
      +1

      There's plenty of land. We need WFH to be the norm, have self driving cars that will speed us across the state for pennies while we watch Netflix, the same cars delivering to us whatever we want for pennies, and AR/VR glasses to make small apartments and houses feel like they are huge mansions.

      • ssfps on 05/10/2024 - 02:13

        Australia doesn't have a problem with fomenting social disorder and poverty leading to a future of unchecked crime and chaos, it has an expectation problem.

        Sorry to burst your bubble of the "boomer dream", but the idea that everyone has this inherent "right" to live in a locality with only 500 violent crimes reported per 100,000k is simply not realistic.

        Australia doesn't have a social welfare problem fueled by economic tyrants, it has an expectation problem.

        • justworld on 06/10/2024 - 17:51
          +1

          Crime rates aren't going up, so clearly, whatever so-called property crisis is unfolding, it's not leading to unchecked crime and chaos.

          No one has the right to what they want - and if they're not smart or hard working enough to get it, that's their problem. I really doubt many of them are going to pick up pitchforks. And if they do, that's what the police and military are paid to snuff out. See whether they can pitchfork a man with an MP5.

          As for economic tyranny, it's not economic tyranny if someone smarter than you gets a better job and you rent from her. That's just life.

          Cope harder.

    • TEER3X on 03/10/2024 - 21:33
      +1

      It's because our population growth is ridiculously high, due to mass immigration.

      If we had reasonable levels of immigration, there would be no supply issue.

    • xavster on 04/10/2024 - 07:02
      +7

      This, @hmy hit the nail on the head.

      OP is just a kid but is not willing to buy a starter home designed for a young couple; he instead, wants to buy a 5 bedroom 3 bathroom house designed for a family of 5 in the suburbs; and is bitching he cant afford it.

      To the young folks starting out, buy a unit, apartment, small house or something you can afford and is in your price range. This will help you, build good savings habit, build discipline but most importantly, build equity that is growing with the market.

      Then, once you've built yourselves up, have a partner that is also going to contribute, go buy that 5 bedroom house.

      You need to put in the work, life doesn't hand shit to you on a silver platter. Don't be an entitled.

      • t_c on 06/10/2024 - 16:43

        Probably can't pass the debt to income ratio test after spending 20% on fuel and tolls for the 3 hour daily comute

    • smartazz104 on 04/10/2024 - 08:38

      CBD

      There's the issue, right there.

    • tessel on 04/10/2024 - 09:27

      We have enough room for people to have 500sqm blocks with 3+ bedroom homes. Do you really thing real estate prices would drop significantly if people all started living in apartments or smaller houses? What happened to the prices of tiny houses? As soon as businesses see money can be made, prices will go up. That's why first home buyer grants and all the other government initiatives do shit. It all gets passed onto the buyer.

      If people want to live near the CBD in a capital city, then I agree go for it and pay the high prices. However, the problem of housing prices has spread beyond the CBD/capital cities and it isn't an expectation thing. Regional and rural towns/cities house prices have gone up and continue to go up significantly. It's clear people are buying them because, as you rightfully pointed out, CBD prices are too high but they aren't buying them to live in. They are buying them to make money. That needs to stop but it won't.

      • Blargman2001 on 04/10/2024 - 15:20
        +1

        There's very little land near to the CBD where everyone wants to live because that's how geometry works. The ring is smaller as we get closer to the centre of a circle. 3 bedrooms, 2 bathrooms on 500sqm within 10km of the CBD will always be expensive because it's rarer and more desirable than the same house 30km away. Short of banning private investment in housing or a collapse in wages, there's enough wealthy Australians out there to keep driving demand for these inner city, freestanding houses (the average Ozbargainer earns 200k a year). Demand has made inner city housing a luxury for those earning a luxury wage. You can argue about housing being a necessity but the even with necessities, the ones who contribute more to society get the better benefits. The only way we have to increase housing close to the CBD is with higher density developments which is what's happening now. So housing affordability will improve for medium and high density developments, maybe even freestanding houses on the outskirts of town, but forget about affordability returning to 2010 levels on freestanding houses close to the CBD.

        • tessel on 04/10/2024 - 15:33

          Yeah, see I disagree we all want to live in the CBD. We don't. Yes, as you mention there are enough people that do which keeps those prices inflated. However, the problem just isn't with CBD house prices. It's gone beyond that and has spread to regional/rural towns. There's no fix for this.

    • May4th on 04/10/2024 - 14:55
      +3

      agree, there is a sense of entitlement that if you have a mediocre job working an average wage you somehow should be able to afford a refreshed 4-bedder within half an hr of the CBD in one of the most expensive cities in the world and if not there is something with the system. unfortunately it's not the 80s any more and this is the new normal

    • cadwalader on 04/10/2024 - 15:17
      +1

      Absolutely an expectation problem. But actually, you still can live in a house 30 mins from the CBD on the average single male income. The Australian dream is still well alive because it was never coined for what Sydney would be like in 2024. It was coined many decades ago while amenities and culture was less sophisticated. Perth today still has better amenities than Sydney in 1980 and its a much closer to what the Australian dream was really about.

      In 1980 average incomes for employed males were about 13k Sydney house prices was about 76k, today's average male income is around 103k so properties would be about 600k in today's prices for what lifestyle you should get in Sydney in 1980. There are a good number of houses <600k 30 mins from Perth CBD if people wanted to go back to the 1980s.

      https://www.abs.gov.au/AUSSTATS/[email protected]/DetailsPage/6302.0S…

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

      3 bed median prices in Perth:

      18 mins drive from Perth CBD https://www.realestate.com.au/wa/balga-6061/

      30 mins drive from Perth CBD https://www.realestate.com.au/wa/midland-6056/

      28 mins drive from Perth CBD https://www.realestate.com.au/wa/thornlie-6108/

      17 mins drive from Perth CBD https://www.realestate.com.au/wa/nollamara-6061/

      23 mins drive from Perth CBD https://www.realestate.com.au/wa/lockridge-6054/

      All directions from Perth CBD. 600k and under. But people rather rent in Sydney than own in Perth, so we can see that ownership isn't really their priority anyway, its the social status that comes from "living" in Sydney.

      • Blargman2001 on 04/10/2024 - 20:18
        +2

        Gen Z and millennials being told that it's an expectation problem don't want to listen. They point at all these graphs that show it wasn't like this when boomers and gen X bought a house. Those graphs do have some truth, but Australia is also now one of the wealthiest nations in the world and we've also gained about 10 million more people too. All that money and people means competition for the best houses is hot. Take out freestanding, inner city houses from those graphs and things suddenly become more affordable. The house your parents had is a luxury now because they were always a finite resource.

        • xavster on 05/10/2024 - 09:39
          +2

          Also those houses Gen Z are pointing out that their parents bought super cheap are the same houses they would sub at and refuse to buy because it's a run down shit hole with no toilet, just a dunny in the back yard.

    • ssfps on 05/10/2024 - 02:19
      -4

      Australia doesn't have a domestic violence problem. It has an expectation problem.

      Everyone wants to live in a safe environment where they are pampered with caring and safe peers and spouses. But there's only a finite amount of patience and mental health, and with worsening conditions, mental health issues and domestic violence will inevitably rise. Simple cause and effect.

      Sorry to burst the bubble of the "feminists dream", but the idea that everyone has this inherent "right" to live in a safe environment is simply not realistic.

      If you search on tinder or FB, you'll find plenty of questionable potential partners and flat-mates to live with. The issue here is that what you can reasonably expect is "simply not worth taking the risk of life and safety". Because, you think you have this inherent "right" to live in a safe and secure environment with fewer social problems.

      Australia doesn't have a domestic violence problem. It has an expectation problem.

      • May4th on 05/10/2024 - 12:18
        +1

        thanks for proving the point, comparing your entitlement to A grade housing to DV is a new low

  • ribze1 on 03/10/2024 - 22:35
    +1

    Plateau at best.

  • bohn on 03/10/2024 - 22:37

    This article is interesting
    https://12ft.io/https://www.nytimes.com/2023/05/23/magazine/…

    Soaring real estate markets have created a worldwide housing crisis. What can we learn from a city that has largely avoided it?

  • Bludgeman on 03/10/2024 - 22:44
    +4

    To combat affordability, I would suggest winning the lottery.

  • Aerith-Waifu on 03/10/2024 - 22:54
    +5

    When I bought my first house I saved around 95% of my total income once tax are taken out. I literally didn't spend on ANYTHING for 5 years.

    You cant have it both ways, you want a house, both you and your partner needs to learn how to save money without spending on anything for at least a few years

    • djsweet on 03/10/2024 - 23:20
      +4

      Lucky for you. Most people can’t do that. I have an alright job and I reckon I could save at best 50% of my income if I really cut it down to the absolute bare minimum for the survival of my family.

      • TEER3X on 04/10/2024 - 21:17

        The percentage is really not important, you just need a better paying job

        • djsweet on 05/10/2024 - 07:46

          You know what you are right. I need to a bump from my ozb-poverty salary of 250k to the wp-400k. That should fix it.

    • JimB on 04/10/2024 - 11:51
      +2

      5% lol

      • TEER3X on 04/10/2024 - 21:18

        Easy to do when you earn $1m plus per year

        • JimB on 04/10/2024 - 23:25

          If you’re earning $1m a year,

          After tax that’s say $600k.

          $30k?

          Possible but unlikely. As your income goes up so does your expenses.

    • onetwothreefour on 04/10/2024 - 15:12
      +2

      I saved around 95% of my total income once tax are taken out.

      So if you were on $135k gross a year and you saved 95% of your nett pay that would leave you with $5k to spend in a year. I guess most people here aren't discussing the people who are lucky enough to be funded by the bank of mum and dad.

      • ssfps on 05/10/2024 - 02:22
        -1

        It's worse than that, because that's with the recent tax breaks.
        If he was on $135k 10 years ago that's more like $3-4k on expenses p.a. which spent on food and bills, in today's money, would be worth $6-8k, less than half of what you'd get from centrelink.

        q.e.d. he's lying.

    • Blargman2001 on 04/10/2024 - 15:33
      +1

      Yeah, not everyone can live at home until they can afford to buy a house.

  • elvislj on 03/10/2024 - 23:22
    +3

    As a Chinese immigrant I would say the housing affordability in Sydney is largely affected by the immigrants, especially those from China. The Chinese has a culture of saving and investing in property, sometimes by compromising their living standard. Also its a tradition that the parents will buy or at least pay for the first 20% of the property for their adult Children. that's why you see young Chinese showing up in property inspections etc and wondering how they can afford it.

    I am an architect working for a major local developer building high-rise in the immigrant suburbs such as Burwood, 95% of the units are sold to the Chinese immigrants or even the investors in China, according to the sales who's also Chinese.

    Then there is Indian who are not as wealthy but came in the largest number every year. They will rent the properties owned by the Chinese.

    So personally I think if they reduce immigration then the market will cool down

    • ssfps on 05/10/2024 - 02:24
      +2

      Level headed and absurdly obvious looking at the demand part of supply vs demand, but unfortunately many people will call you a white supremacist for stating this, to shut down the argument publicly.

  • jedimaster on 03/10/2024 - 23:40
    +3

    I lived in a 2 bedder unit in sydney and sub-leased the other room to a student(this is with approval from the landlord). This is how I saved deposit for a land and eventually built a house on it.

  • matt26 on 04/10/2024 - 04:21

    The only way it gets better is with a 12 percent unemployment rate but then you're worried about your job and your house.

  • Bludgeman on 04/10/2024 - 07:10
    +3

    Prices arent going to drop double digits.
    So the only way is incomes need to increase.
    This may sound dumb, but you need to make more money. Whether that is literally making more money through multiple jobs, or changing the way you save and invest.
    Rolexes & sports cards are the future.

  • morse on 04/10/2024 - 07:58
    +2

    I would rather continue to rent in shared housing or do something more radical like move internationally.

    So you want to fundamentally change the structure of the tax and housing system for your preference not to do what everyone else does and pay off a mortgage for their shelter?

    In your situation you can afford shelter, you just only want a nice house in a desirable area.

    If your situation is as you describe you could pay something off of a decent standard within 15years as a couple. Flip it and upgrade if you want something bigger/different later. By all means follow your preference to share house and travel, but note prices will keep going up whilst you’re doing this. Better off getting into the market whilst you can than waiting for the government policies to change and possibly have an impact on the market.

  • tessel on 04/10/2024 - 09:07
    +2

    The economy is housing. Everyone wants to make money. The easy way to make money is in real estate. Why will housing become more affordable when everyone wants to make money with as little effort as possible? Yes, some areas will come down and yes some people probably paid way too much because they didn't do their homework before buying but real estate will NOT see any meaningful correct or adjustment EVER. There's too much money out there. Why fight it? If you can, start buying investment properties now if you don't already own at least one. Don't overpay and obviously do your homework. No-one gives a shit about you or your family. Nothing is stopping this real estate train until it is too late, so cash in while you can and do what you can to make sure your children aren't even more (profanity) than we currently are. I hate that this is the case. I believe everything should be done to make real estate NOT a bloody "get rich" pyramid scheme that it has become BUT that is not going to happen.

  • kokita on 04/10/2024 - 09:53
    +1

    If you borrowing power only less than 2 million dollars, than you are still considered middle class like most of us. Expect to live in an apartment with nice location or buy a new house 50km from Sydney CBD.

    Another option is to rentvesting. You buy a property but for an investment and rent wherever you want to live in.

  • centrelink on 04/10/2024 - 10:42

    I thought the further you go out, the cheaper houses become. Are people just. Or willing to live further out and live in the CBD? Or is it even houses in the countryside affected?

  • eek on 04/10/2024 - 12:28
    +1

    Get in now while you can. It's not going to get better! At least not quickly enough.

    You'll always to compromise somewhat - that's life. Unless you are uber wealthy, you'll either have to purchase that shoe-box, or find one with renovation potential, or live further away, cut discretionary spending etc. Do you guys have kids? Planning on kids? They're pretty expensive too - unless you can get free help from parents, like people who get help from parents to purchase property.

  • dontboopthesnoot on 04/10/2024 - 13:27

    Goes up every 7 years

  • Farmacist on 04/10/2024 - 13:51

    Simply supply and demand, new house being construct is too low, demand remain high due to migration and other factors. Price will keep going up unless supply meet damand

  • JamesBingo on 04/10/2024 - 14:17
    -1

    Best and only advice is setup in regional areas between Sydney and Brisbane, huge savings, improving roads to Sydney/Brisbane and airports. Sydney is a punish, I pay half my after tax dollars on my mortgage. Life wasn't meant to be like this - we've got it all wrong.

  • SuperMid on 04/10/2024 - 15:10

    Haha

    hahahah

    hahahahaha

    just like the cost of fuel will decrease, iphones will become cheaper and the ps5 pro will get a discount.

  • SwaggyE on 04/10/2024 - 15:27

    It's a simple supply & demand issue really.

    Population growth has increased significantly over the last 20 years while our infrastructures couldn't keep up. Everyone still wants to live within 30mins drive of CBD (rightfully so) but it's just not possible in today's climate.

    The good old "Back in our parent's days it's a lot easier to afford a property and own a home in their 20s" is long gone. Yes changing investing rules might help with the housing affordability but it'll never be easy. It's not just an Australia issue - but an issue across the globe with the ever growing population. There's simply more people and less land available.

    You'll have to adjust expectation to either live further out or settle for smaller homes with reasonably good location. Otherwise just have to keep renting like you suggested.

  • croseks on 04/10/2024 - 15:29
    +2

    Buy an investment property.

    Rent will help cover the mortgage, your quality of life won't change much, give it 10 years and you can sell it and buy something you like.

    Either way bro, its called sacrifice. Make it work, or don't. It's up to you.

  • Dack Smith on 04/10/2024 - 17:26
    -1

    The government must take back control of housing and make it cheap and affordable for all Australians, by force if required - we can’t be held hostage by greed and capitalist landlords.

    No more pandering to people with too much money on their hands buying all kinds of non-essential luxury crap while others go hungry.

    If not, at least increase taxes for people earning more than $200,000 to 60% and a new 50% landlord tax to help.

    People that neg this post are definitely those who are rich and well off capitalists lol

    • TEER3X on 04/10/2024 - 21:22

      Share if you agree

    • ssfps on 05/10/2024 - 02:28
      +2

      If not, at least increase taxes for people earning more than $200,000 to 60% and a new 50% landlord tax to help.

      You're falling for their divide and conquer. People earning 200k aren't the enemy, and people earning 500k aren't the enemy.
      Your enemy are so rich they will happily pay themselves $1 salary, because income tax barely effects them.

      The only way to make the system fair would be to eliminate all income tax and only tax wealth/assets. Then the mega-rich would pay their fair share, and even those "rich" people on 500k p.a. would pay less tax (rightfully so).

      Interestingly, this would also disincentivize hoarding/speculating on assets including housing, and incentivize working/labor to generate income, leading to a more industrious population, more small business, cheaper/more accessible housing, etc etc.

      Our problem could be seen as us being too "communist" and not free-market capitalist enough. People on $400k have the purchasing power an average professional had 50 years ago, yet is today on $150 and taxed a greater % of their income. Why are income tax brackets so broad, few in number, and set so low? Why is anybody that deviates more than a few % from the mean, even if they are a hard working small business owner, seen as a "rich enemy"? It's all crazy.

      • Talsek on 05/10/2024 - 09:58

        Inequality economics needs to be more mainstream. Though I’m not sure that an asset tax is ‘free market capitalism’ 😅

    • xavster on 05/10/2024 - 10:27

      Mate, we tried this.. it's called communism… didn't workout.

  • beefmaster on 04/10/2024 - 18:40

    Housing affordability doesn't benefit the wealthy, so there's little incentive to address the problem. Money talks, and politicians will only apply temporary fixes to create the illusion that they are solving the issue.

  • acersaurus on 04/10/2024 - 18:48

    Consider moving to an outer suburbs like Werribee or Pakenham, buy a nice townhouse for 500k.

    I don't know if things are going to get better, I hope so but I'm not betting on it. Arguably now in Melbourne there is a better opportunity to buy than most parts of the country, and perhaps that window won't last.

  • alexdagr8 on 04/10/2024 - 19:24
    +2

    Unpopular opinion:
    How bout this: Save Your money. Don’t spend frivolously and go talk to a mortgage broker. It’s doable. It’s definitely not easy but is doable (coming from someone who bought their home in the last 2 years)

    • ssfps on 05/10/2024 - 02:35

      Save Your money

      Please explain how to save enough to beat the price increases in perth over the last few years.
      In the last 3 years you'd literally have been better off financing a 5% down payment from a loanshark and paying high LMI on 4 properties. You could then sell 3 of them today and have 1 fully paid off.
      "Saving" makes no sense when the median price of a house is increasing $300-$400 per day, and people on average are earning $350 a day pre-tax.

      • xavster on 05/10/2024 - 17:34

        But aren't those FIFO workings making bank out there in the mines?

        I remember seeing a 60 minutes report about FIFO worker making over $1.2m but blew it all on Bali hookers and jetskis….

  • qaz182 on 04/10/2024 - 20:36

    In the United States, income inequality fell (yes fell) all the way from 1930 (start of the the great depression) until August 1971 when then President Nixon defaulted on the gold standard. So it can be done if there is enough political will to do so.

    But as things stand now, I don't see a population angry enough to make that change yet.

  • bokka on 04/10/2024 - 20:50
    +1

    To all the people saying well my first house was a fixer upper or I bought out in woop woop as my first house and only after 10 years could I upgrade… keep in mind the price differential between houses and apartments, and even houses between desirable and less desirable suburbs, is now so large that even if you have purchased that first shithole, because you can't save fast enough to catch up to the difference, you will never end up buying in that nicer suburb / a house after an apartment. Ie if you have a 750k apartment and houses are 1.5m, if both go up 10%, you now are 75k worse off.

  • duluxe2000 on 04/10/2024 - 21:03

    We need to define "affordability" and work on that. I assume that is the case of an average household income (160k ish in Sydney) can afford a 3 bedders unit in a location which is no more than 30 mins travel each way from their work . It's essential we as society to achieve that.

    OP did not mention about their income or desired location to buy (new standalone house) so it's hard to answer.

  • pogichinoy on 05/10/2024 - 02:18

    Expectation problem.

    Most people have champagne tastes but have beer money.

  • ninnypoop on 05/10/2024 - 06:16
    +2

    My partner and I are just about to buy. I admit we are in a good position. We didn't come from wealth but both worked hard to build our careers and now are earning good coin. Kid and debt free (besides HECS) and we can comfortably buy what we want.

    We are choosing not to over leverage ourselves so are going to buy 30 mins from the CBD where the houses are hell affordable. I'm talking $500k to $600k for 3 bedroom houses on decent blocks. The idea is that the area hopefully sees growth in a couple of years and we can then "upgrade".

    With the government's home buying fund you only need 5% deposit, so ~$30k to put down for the house. I would think $30k - $50k should not be too hard for couples to save.

    I have friends that are single and it's much harder for them to get into the market.

    Honestly, and I feel bad saying it, but I personally don't feel the housing pressure around buying. It's the rent thats currently killing me. So I'm keen to get out of this trap asap.

  • mustang on 05/10/2024 - 07:08

    My take to housing affordability is that what you can buy with housing will shrink over time. Building costs will only go up and domestic demand is getting more competitive for the same piece of land. The newer the property, the higher the build cost.

    Look at the vacancy rates even when rentals are increased, and this is under increasing compliance costs, tenant rights and added land tax. Rental expense will only go up as the cost for rental providers go up/exit the investment market - more houses being converted to owner occupiers.

    The future is in density living as there are more and more people wanting to live in the same block of land. As much as I want to live in the nicer inner city suburbs, the reality is that these inner city suburbs come from generational wealth and generational family homes I can’t compete with unless they sell and high density housing is built in place.

    I don’t see how buying the same thing in later years is even remotely possible. What we will be able to buy in the future with housing will only shrink. Houses do go up and down depending on location etc but generally, good properties in good locations (which is everybody’s first preference and focus) will always go up on average.

    We can only play with the cards we’ve been dealt with so my advice to myself is to focus on the things I can control aka income productivity and smart investing.

  • mousie on 05/10/2024 - 08:47
    -1

    I repartnered in my mid 30s after never owning a property and renting since my early 20s. Now own 75% of a 1.1m house

    The equaliser is how much you save from your income as a %age.its asier to go stuff it, I'm renting anyway so let me buy that bs I don't need.

    Old car, eating at home. If you can save 1-2k per month you'll get there.

    I noticed apartments in Haymarket and prhmont ,/ Glebe dropping 20%. Even Parra.

    Just work a plan it's not sexy to save.

    • Talsek on 05/10/2024 - 09:45

      I’ve noticed Parra steadily climbing for the low-medium rises I’ve been looking at.

      Are these high rises you’re talking about? I have noticed some weirdly cheap ones

      • mousie on 05/10/2024 - 20:05

        Yes high rises have dropped mostly because of strata and dampening of demand

  • Windows98 on 05/10/2024 - 17:47

    Almost every has invested their full portfolio into housing. So no, changing that in one hit would be disastrous for anyone who suggests it.

    Small policies need to change overtime to make housing less profitable as an investment and move investors onto other areas like they should be doing.

    Vic introduced the land tax and it's annoyed many investors who were stretched financially to sell and help with prices. More things like this and grandfathering negative gearing etc over the years will do it. But the current government is afraid of another election loss if they try because the libs already have their attack ads ready.

  • rilebags on 05/10/2024 - 18:41

    Not unless mass immigration changes, which it wont, as it's paid for by the property industry.

  • wasabi3 on 05/10/2024 - 23:30

    I expect housing affordability will only get worse. Australia's dependency on the use of real estate as collateral is so egregious that a controlled de-leveraging is now impossible both politically and economically. Similarly any threat of deleveraging from a crash will be met with swift relief for homeowners and, as last resort, the sort of deferred payment schedules that were trialed during COVID. The net result I expect will be that our kids will dream of owning a unit not a house. The way I see it, our kids will need tick at least one the following options to afford a home; 1. Be among the top 5% of earners (+ partner), 2. work remotely from a cheap country (if salaried, + partner), 3. inherit wealth, 4. start a successful business, 5. sell a business, 6. greatly outperform real estate using other financial instruments like stocks/commodities/crypto.

    Those of us ~30yo+ will be among the last few to be able to afford the Australian dream on a middle class income.

  • love2buy on 06/10/2024 - 08:43

    As every generation join in this game of real life monolopy, there comes a point in time where landing in jail isn't so bad

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