Housing policy and affordability

[What'sinaname]

<Split from "Labor loves tax" and "Sky News bashing NDIS" threads>

Government efficiencies can (and should) always be addressed, but that’s not necessarily tied to a higher or lower tax rate. I don’t think we’ve ever reached a point where all areas of public need have been satisfied and additional government spending is superfluous. I think it’s reasonable to assume that across-the-board tax cuts will inevitably lead to important services being underfunded. And if, as Woods of Ypres points out, the system isn’t fair, that should also be corrected.

This is why the negative gearing rort, for instance, drives my generation crazy. We see areas of need, and then we also see wealthy people with multiple properties getting chop-outs that do nothing to aid the economy but only incentivise property hoarding. It’s a tax concession that isn’t needed, and that just increases the burden on the rest of us.

It’s a complicated (and ever-shifting) equation to balance all this, but balance is essential and governments need to be constantly striving for it. Taxing smartly and fairly is key to that.

There's nothing fair about the system, there's winners and losers , but overall our system isn't bad. Could be better but could be worse. There's a balance between how much the Goverment(s) should intervene and how far they should stand back. Employing more people in the Public Service (eg, Victoria) doesn't mean more stuff gets done, it can actually have the opposite effect.

Get over the negative gearing "rort", without it there wouldn't be as many rental properties and housing prices wouldn't be more affordable.

Blame Governments, of both colours and both state and federal if you want for basically abandoning public housing for the notion of encouraging middle class home ownership, a script that goes back many decades,

Negative gearing isn’t a tax concession. Investors are willing to take a loss in anticipation of increase housing prices. If housing prices don’t go up, negative gearing is just bad investing

[David]

Seems like a pretty safe long-term investment to me.

https://matusik.com.au/2021/07/06/140-y ... rice-data/

[think positive]

Who lives to be 140?

The market is scary volatile right now. Interest rates and builders going bust.

When we bought our first rentals the expectation was for example $150k $150 per week rent, $300k, $300 a week rent. That doesn’t happen anymore, Now factor in the mandatory yearly and biannual checks, plus added rights for tenants, quite frankly take away negative gearing and the amount of rentals will decrease further.


I’m really curious as to how negative gearing increases the burden on this infuriated younger generation? I mean they could buy and then rent out a house themselves. Priorities.

[What'sinaname]

Priorities.

That's the inconvenient truth right there.

I want a gap year spending a year overseas on holiday but then want to whinge about not being able to afford a house.

[David]

[What'sinaname]

There are always options. There are plenty of house and land packages in the West, North and SE of Melbourne for less than $500k.

If you (not you in particular but millennials) want to whinge that you can't afford your first house in Hawthorn, Brunswick, Elwood or Newport then it'll fall on deaf ears.

[roar]

This gets brushed over almost every time:

the point is it’s just way more expensive now to enter the housing market than it was for previous generations.

It's a simple property-to-income ratio that is pretty clear but doesn't suit the narrative of the "young people, these days" crowd.

[stui magpie]

^

That's the trick isn't it. The suburbs have expanded massively over the last couple of decades. To get into the market now, you have to be prepared to compromise on location and/or space.

While someone may want a 3 bedroom house with a back yard close to the city, they may need to settle for a townhouse in Cragieburn near a park to start with.

[David]

There are always options. There are plenty of house and land packages in the West, North and SE of Melbourne for less than $500k.

If you (not you in particular but millennials) want to whinge that you can't afford your first house in Hawthorn, Brunswick, Elwood or Newport then it'll fall on deaf ears.

No doubt compromising on location, size, quality of dwelling and so on helps bring the price tag down. But $500k is still a lot, and many of us don’t have anything like a spare $50k in the bank for the deposit. Some millennials have moderately well-off parents who’ll give or loan them some of that, but we’re not all that lucky.

The maths don’t lie: back in the 1980s, you could get a decent family home with a backyard in the city for five figures. Every time that price rises in real terms, more of the kind of people who could afford to buy a home in the past start to miss out. That’s where we are now.

[stui magpie]

Yeah, but any house you could by near the city for 5 figures was a run down shithole, even by the standards back then, that would require massive amounts of renovation.

[What'sinaname]

There are always options. There are plenty of house and land packages in the West, North and SE of Melbourne for less than $500k.

If you (not you in particular but millennials) want to whinge that you can't afford your first house in Hawthorn, Brunswick, Elwood or Newport then it'll fall on deaf ears.

No doubt compromising on location, size, quality of dwelling and so on helps bring the price tag down. But $500k is still a lot, and many of us don’t have anything like a spare $50k in the bank for the deposit. Some millennials have moderately well-off parents who’ll give or loan them some of that, but we’re not all that lucky.

The maths don’t lie: back in the 1980s, you could get a decent family home with a backyard in the city for five figures. Every time that price rises in real terms, more of the kind of people who could afford to buy a home in the past start to miss out. That’s where we are now.

Yes. So you do what we all had to do. Save. These are the things I didn’t have until after buying a house / getting a mortgage

1. New car
2. Overseas holiday
3. Footy membership
4. Nice appliances / furniture
5. New computer

Two people working full time both committed to saving as much as possible, as fast as possible.

[Skids]

Yep.

When my 1st marriage when to shit, I was 24, moved into Mum & Dads shed and had to start over. I worked my wages job plus every weekend doing whatever I could to get to save money.
I met Kelly and we moved into a shit box rental where we continued to save every cent we could until we had our deposit.
Interest rates were 17%, all our furniture was either hand me downs or stuff I found on verge throw outs.

Nothing was ever easy, there were no 1st homebuyer schemes & no keywest loans (only 2% deposit required... not sure if that's just a WA thing?)

[stui magpie]

I can relate to the furniture, I didn't buy my first new lounge suite til I was 40, prior to that it was all from hard rubbish.

Plus lots of little things. Mum made most of the kids clothes until they were well into primary school, I took leftovers to work everyday for lunch and never bought a coffee, drank free instant coffee at work, take away food once a week at most.

I understand housing prices have increased substantially relative to income, but that didn't mean it was easy back then either. You had to do without a lot of stuff with the long goal in mind.

[think positive]

There are always options. There are plenty of house and land packages in the West, North and SE of Melbourne for less than $500k.

If you (not you in particular but millennials) want to whinge that you can't afford your first house in Hawthorn, Brunswick, Elwood or Newport then it'll fall on deaf ears.

No doubt compromising on location, size, quality of dwelling and so on helps bring the price tag down. But $500k is still a lot, and many of us don’t have anything like a spare $50k in the bank for the deposit. Some millennials have moderately well-off parents who’ll give or loan them some of that, but we’re not all that lucky.

The maths don’t lie: back in the 1980s, you could get a decent family home with a backyard in the city for five figures. Every time that price rises in real terms, more of the kind of people who could afford to buy a home in the past start to miss out. That’s where we are now.

When I started work my first year apprentice wage was $88 a week take home! My kids both started on $70k plus a year, and even their friends without degrees are paid a lot better than we were, everything has gone up, income and outgoings.

Choices and priorities. My generation saved fora deposit before travelling the world or having kids, we had secondhand furniture and a holiday on the Gold Coast every couple of years. Our first houses were nothing special. And at least 1 parent worked 2 jobs. Our first rental was $52k and it was terrifying! But so worth the risk.

Both my kids had jobs during uni, and had almost a deposit saved when they got their degrees. The eldest saved up over $120k for her $570k basic spec home in Truganina. Not the best location, but she’s in the best part of Trug and it’s hers. We contributed zip, not even a loan. We did do up her yard for her and buy some 2nd hand furniture for her. Eventually, we will help out. But she has done it all on her own. Junior has a decent deposit after 14 months full time, we will start looking in the next 12 months. Yes they lived at home, because our priorities meant we could afford to have them, and they didn’t drive us to kick them out!

Again, choices and priorities, as WIAN said, in a nutshell.

Your road is your choice, not right or wrong, but don’t bitch about hardships and expect handouts all the time. Still cheap housing or units in truganina, and my eldest used to commute every day to the city , til she switched jobs and now works from home, so that’s no excuse. You live inner city, how much rent are you throwing away for location? You have said you could get a better paid job but you love your job, that’s a choice right there, and it’s fine to prioritise satisfaction over dollars, but it’s still your choice.


One thing I did teach my kids: do what you have to do before what you want to do. Then enjoy the reward.

[think positive]

There are always options. There are plenty of house and land packages in the West, North and SE of Melbourne for less than $500k.

If you (not you in particular but millennials) want to whinge that you can't afford your first house in Hawthorn, Brunswick, Elwood or Newport then it'll fall on deaf ears.

No doubt compromising on location, size, quality of dwelling and so on helps bring the price tag down. But $500k is still a lot, and many of us don’t have anything like a spare $50k in the bank for the deposit. Some millennials have moderately well-off parents who’ll give or loan them some of that, but we’re not all that lucky.

The maths don’t lie: back in the 1980s, you could get a decent family home with a backyard in the city for five figures. Every time that price rises in real terms, more of the kind of people who could afford to buy a home in the past start to miss out. That’s where we are now.

Yes. So you do what we all had to do. Save. These are the things I didn’t have until after buying a house / getting a mortgage

1. New car
2. Overseas holiday
3. Footy membership
4. Nice appliances / furniture
5. New computer

Two people working full time both committed to saving as much as possible, as fast as possible.

This, I shoulda kept reading before posting,exactly this.

And what skids and Stui said!

I still feel guilty buying coffee out!