Three popular words: housing affordability crisis

Will prices keep on going such that it is only people who can afford 2 million for a flat buy, and everyone else rents? No one else will be able to afford the rent though…

This topic is becoming more popular. (That, or Facebook’s algorithm has picked up on my interest.) I’ve been tracking this as an interested observer since about 2007. I’ve never bought because I couldn’t feel I could afford it; plus my life has been so nomadic it wasn’t practical (it feels hilarious to say that, but it has).

This Lateline story raises some valid points but it’s almost comical in the points it misses.

The Treasurer’s so concerned, he set up a taskforce with the states to deal with the issue.

Reads dangerously close to a line out of Yes Minister or The Hollowmen. Sometimes when a minister does this they are indeed very concerned. Other times they are rather anxious to have everyone know they are Doing Something. Housing affordability (and its less attractive friend, homelessness) – we already know things we can do to ease this. Joe Hockey could have a brainstorm on the back of a Ministerial envelope and get something going in 24 hours if he felt motivated. We could stop treating housing as an investment class. We could tighten up on lending. We could invest in regional areas to encourage people out of 100 km long cities and revitalize our small towns. (Oh wait.) We could give homeless people houses and we could let artists and craftspeople use empty shops to host their wares. It’s all been done.

CHRIS BOWEN, SHADOW TREASURER (Last night): Our principle would be that people who’ve invested in good faith with existing rules shouldn’t be disadvantaged

The big problem is in Bowen’s words: we don’t want to disadvantage those already in there. And I don’t want to either. Already well off investors are in there, plenty of whom could take a hit, but first time home owners and way overstretched small time investors are too. But none of the current policies are going to help with that long term. Also, I am a lefty pinko commie bleeding heart small-l liberal, you don’t want someone with a soft heart in charge of this. You want someone who can make tough decisions that will benefit the maximum number of people.

We can start taking measures now to make it uncomfortable or we can wait for the extremely terrible, horrible, no good, very bad, reverse Big Bang when the bubble bursts.

TONY JONES: But the biggest factor driving demand is a growing population.

It’s not our growing population, we’re not even at replacement.

SASHKA KOLOFF: With Sydney’s median house price expected to reach $1 million this year, the price tag of around $600,000 for a house here is well affordable.

$600,000 is not affordable for the average couple let alone the average person if they are trying to buy a house on their own!

SAUL ESLAKE, ECONOMIST: While that’s been much to the benefit of those who already own at least one property, it’s been much to the detriment of those who’ve increasingly been locked out of Australia’s housing markets. I’m often surprised that there isn’t more anger among young people at the way in which the housing system has been in effect rigged against them by their parents’ generation. But it would seem that instead of marching on the streets demanding that something be done about reducing the price of housing or improving housing affordability, increasingly young people take out their revenge on their parents’ generation by refusing to move out of their parents’ homes.

I don’t want to rag on Eslake too much because he’s not wrong about investors, although the banks and lenders who have aided and abetted investors deserve more scrutiny. I’d like to clear up his confusion though. Young people are very angry about it. Those who still want to buy feel bad because we’ve been told it’s our fault. Those who have given up, we often console ourselves that it would be hard to buy anyway, because with the casualisation of the workforce and the disappearance of permanent jobs, who can pick a suburb or town or state, even, to settle in? And it’s not revenge on the parents – it’s necessity.


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