The politics of housing

[roar]

I agree that dogs are awesome. Dog owners not so much.

Too many of them think that it's ok for their dog to misbehave or bother other people just because the dog is cute or they, themselves don't mind the behaviour. Similar to parents of small children, really.

[Lazza]

I agree that dogs are awesome. Dog owners not so much.

Too many of them think that it's ok for their dog to misbehave or bother other people just because the dog is cute or they, themselves don't mind the behaviour. Similar to parents of small children, really.

Similar to some adults as well

[think positive]

Indeed.

disagree, a lot of people are entitled wankers, dog owner or not.

Exactly! Dogs are awesome! In fact, most dogs are better than your average human.

yup

[think positive]

The smart money does seem to be on a Labor majority now, yes. Which checks out, as I put money on the result being a hung parliament.

I'm not sure if it's a problem, it is what it is.

In 1984 I could have a night out for $20. $5 fuel in the car,(40km round trip) $1.20 for a packet of smokes, $1 a pot, $6 for a decent dinner. Not sure how that plugs into the calculator but the same packet of smokes is now $50.

Hypothetical, if property investors were suddenly banned, would that have a real impact on housing prices or would it just mean that there were suddenly no rental properties and a lot more homeless people?

Cigarettes have been taxed like crazy since the 1980s, so not sure if that's the best comparison! Some of the other items do seem to have gone up in price more than the inflation calculator would suggest (what's a pot now, $5+?), but I guess it should still be a relatively accurate estimate of such things.

What I'd be interested to see is how wages have changed (for a standard job like, say, working in a supermarket). My guess is that they might have actually gone down when adjusted for inflation.

The increase in house price relative to income is a furphy as once you get into the market, your income will grow considerably faster than the repayments will and you will sit back and enjoy any capital appreciation. So while repayments are daunting in the first few years, once your salary goes up, you are spending less on servicing the loan.

Living in the inner city should be considered a staged affair. Buy a place in the outer suburbs and then use that equity in 10 years time to move into the inner city. Consider the loan a type of forced savings.

The problem with the I demand it now generation.

Well lookie, a year on same truths! And I love Pies4shaw rant!

[What'sinaname]

More rentals are being sold due to a range of issues including:
- Land tax increases
- Increased compliance costs of minimum standard rentals
- increased interest rates.

While this stock is good for first home buyers, rent is increasing and will continue to soar as rental stock dwindles.

[pietillidie]

^Importantly, though, as explained in another thread that's a planning problem, not a capital problem.

[slangman]

One of my nephews purchased his first house with his girlfriend in 2021 just 3 days short of his 21st birthday. It’s not a “dream” home and it needed some cosmetic renovations but they are on their way.k
He had just completed his apprenticeship and she works in admin.
Anyone who thinks housing is unaffordable is either looking at properties that are beyond their means/ requirements or they don’t have a good enough work ethic.
My nephew has an amazing work ethic and regularly works 6 days a week, even picking up work with mates if his employer doesn’t have work on Saturdays. His girlfriend also does some extra Maccas shift on weekends.

So it can be done.

Two 20yo buying a house in 2021….who would’ve thought!!!

too much whinging and poor work ethic by too many people.

[David]

Just curious: did either of them get any financial assistance / loans from their parents (the famous "bank of mum and dad") for the deposit?

[slangman]

Just curious: did either of them get any financial assistance / loans from their parents (the famous "bank of mum and dad") for the deposit?

No financial assistance other than living (no board or rent) at home before moving into their new house.
They haven’t had “gap” years in Europe nor are they extravagant spenders.

[think positive]

Well done slangman. That’s awesome for your son and his GF! Brilliant work ethic.

my daughter bought her house in 2021, but She was 27. Had a decent 20% deposit, paid a little over $550k, bought at just the right time before the climb. it was a 6 years old Simonds home. Only 1 feral neighbour! We bought her security cameras and some kitchen stuff and a second hand couch. hubby did some gardening and security lights, the rest is all her. Her BF lives with her now, his mum bought them a really nice fridge to replace my mums small one. He’s saving for a house now, then they will rent out hers and later, buy 1 together.

No loans of monetary gifts from us at all. Just the first home owners grant. As you said, lived with us while She saved. She had her chores to do. No gap years! She’s still driving the 2011 car we bought her, and he has his nans 1998 car!

A lot of her friends have done the same.

[pietillidie]

^20% is a good deposit these days, so well done.

But generally there's only one way to analyse anyone's story properly, which is to know what the income, spending, savings, health, careers and black/white marks are.

Then, there are guarantors and inferred guarantors that are rarely mentioned. An inferred guarantee comes from indirect signals, including parental assets, family signals and social signals.

Of course, that info is always hidden because not only is is private, its revelation puts lenders at serious legal jeopardy.

Don't get me wrong, I'm not doubting the sincerity and the competence of the young people concerned above, just the transparency of the capital allocation system more broadly. The worst ethical asymmetries tend to come out much later in data showing that health, race, job, social group or whatever thing that shouldn't be considered was clearly considered.

(One of the great mischiefs of our times is information delay, with the belated data release being accompanied by zero accountability because 'it's in the past now').

That said, familial competence also matters greatly, with a good deal of the financial differential coming from social support and awareness. E.g., I'm not at all surprised, TP, that your kids are commercially competent. They would've been raised with that awareness and nous because it's a clear part of your value system. But not all kids have that fortune.

Sometimes, even when all the data including earnings and savings are equal, some kids just lack a confidence and determination to find the right lender and persuade them accordingly because they've never seen that persistence modelled by those around them.

I also think lenders know exactly who will sue them if they don't play ball or step a fraction out of line. That's why I was encouraging David to not let up on that scumbag and shabby company that stole his money. Conveying potency is a stance and posture one needs to take, sadly enough.

But as I say, you can only make a reasoned judgement on that when you see the data and the signals the lender is receiving. Some of the signals won't even be recorded, such as mum or dad accompanying kids to the lender's office or making a call, or someone name dropping the fact that the parents also have an account with the lender, or whatever.

And all of those cues become exaggerated under shortages, whether of housing or capital, and people have to be sorted and prioritised. The smallest signals will inevitably lead to a sorting that won't be made evident in individual stories.

[think positive]

all good points, and i agree.

I also would not have given up in Davids case, but i would have been on the front foot from the get go!!! but then ive had a bad driver try to con me, and 1 tried to con my eldest daughter. it was drummed into them from day 1, take photos of damage to both cars and anything else in the vicinity, licence, any insurance info, and they still have a piece of paper with my details on it to hand out. if someone is aggressive stay in the car, lock the doors, call the cops and me!

My eldest got the loan all on her own, yes we are at the same bank for personal accounts, but we had nothing to do with it and her salary and stable history, work and savings-wise, was easily enough to get the loan she needed. She was smart, She didn't over extend herself, it's not the best house in the street, but its hers and it's enough for now. One day we will indeed help them out but not until they are settled. And now She certainly appreciates how lucky She was to live rent free while She saved. She really is doing amazingly well, shocked me, the kid that booked all her uni classes for the afternoon/evening so she could sleep in is smashing it! Its very obvious how much Her boss thinks of Her talents, and im so damn proud of Her its not funny!!!

Meanwhile junior is saving hard, but im in no hurry for Her to leave!! She is the teacher I always knew She would be, She is literally changing lives, showing kids from the wrong side of the tracks the path to self esteem and confidence. its amazing, the letters and cards She brings home from the kids, they make me cry!! Im blessed and I dont take it for granted!!

cheers!!

[pietillidie]

The UK numbers in black and white, and this will be well underdone given the subtle signals that persuade lenders that I mentioned in an earlier post, and young people living at home rent-free as noted in the article. Even worse, look at the upper bounds of the age bracket!

Some 47% of all homes bought by those under the age of 55 will have been done so with the help of parents, grandparents or other relations.

But L&G said those without such support risk being "locked out" of the market.

...

Mr Hickman also said that families were also giving much more non-financial support, such as allowing adult children to live at home rent-free while they save for a deposit.

One-in-five of those surveyed by L&G said that without family support, they would have to delay their home purchase by more than five years, while one-in-10 said they would not be able to buy a home at all.

"Family wealth is increasingly becoming a prerequisite for homeownership, effectively locking some groups out of the housing market for years while they save for deposits, or even altogether," said Mr Hickman.

The research found that the scale of support from family members varied between regions. In London, more than two-thirds received help in buying their homes, with an average contribution of £30,200. The only area with a higher level of help was in the East of England where the average was £32,100.

By contrast, the lowest average amount from families was in the East Midlands, at £20,000, and West Midlands it was £19,800.

https://www.bbc.co.uk/news/business-66633680

[stui magpie]

Please correct me if I have this wrong, but my understanding is that the UK is a poor comparison to Australia for home ownership.

In the last half of last century, in Australia, home ownership was the ideal and it was relatively cheap.

In the UK in the same time period, rental was much more common. Public housing was available from local councils, private rental was the exception. Probably a hangover from large parts of England being leveled in WWII

So two very different cultures happening there

[pietillidie]

Del.