I don’t get out to that side of Melbourne much. Isn’t Northcote the carpet muncher capital of Australia?
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Yeah, you don’t get out much by the sounds of it.
Nope that is Trentham
Musk actually, not that there’s anything wrong with that.
Can someone explain to me why housing affordability is an issue that the government has to fix? I’m serious, I don’t understand it. If it’s too expensive to live in Sydney, don’t. There are other places to live.
I agree. I am sick to death of hearing about it. People who keep getting outbid at auction and have been outbid 20 times. If you have been outbid multiple time them you are obviously looking in the wrong market. People who whine about others buying investment properties instead of thinking, gee maybe if I bough one or two investment properties and rented, or stayed with my parents, in two three years I will be able to buy where I want to live with the capital gain I have made.
No people want it handed to them on a plate. I can’t afford to live where I want to in Sydney or Melbourne therefore the government has to do something about it.
Too bad if their actions undermine the entire market. I’ll be happy!
It’s rubbish.
What if you are wanting to get out of renting and are are being consistently outbid by an overseas buyer or an investor negatively-geared up to the eye-balls? I expect governments to govern, and the fact is, how they legislate today in these areas directly affects affordability.
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It depends. On a social level, we want people to be able to house themselves and eat well etc. We should also believe in people’s right to live close to their work, study friend, family etc
Economically - We also don’t want them spending 4+ hours a day getting to or from the major employment or services centre as then we have to develop roads or public transport as a result. We don’t want people to borrow too much and not spend on other things or tie up all our wealth in debt.
The idea of just buying a couple of investment properties is really quite out of touch.
A loan requires at least a 5% deposit - that is $15-20k now for a shack in caroline springs.
The issue regarding negative gearing is pretty simple - why should I pay for your investment? Pay for it yourself.
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Can’t the market solve this though? If everyone priced out of the cities just up and left wouldn’t that leave a vacuum of buyers in that market and either slow or reduce prices in the cities?
People should be incentivised to move out of the cities, not be helped to stay in them.
(Maybe they already are, again I don’t understand this topic at all)
Everyone moves out, investors buy more and claim negative income which you pay for.
Employment is mostly in cities.
If people left cities on mass who’s living in those investment homes?
Negative gearing is a separate problem that should be, but won’t be, fixed.
I also realise I’m drastically oversimplifying this.
This is part of the problem though.
imagine the economic nightmare if property houses fell dramatically. This is why the government gets involved (also simplifying things).
The amount of debt that people carry to afford these houses is insane, if the bottom falls out of the market (which it might in the next 2 - 3 years) then the banks etc. hold a bunch of assets that are worth less than the amount the loans were taken for.
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They actually are leaving the city. My bank asked if I was buying an apartment in the city. I said no. They said, OK here’s your money. Won’t give easily to those looking for investment apartments in docklands etc as they sit empty and collect negative gearing.
Its the only real element of housing affordability I care about besides stamp duty (theft) and housing supply (with urban planning).
I moved to Ballarat to get into the housing market 6 years ago so I know something about what you have to do.
The market functions within the legilative framework that the government sets. The two cooexist sybiotically & the framework has to be adjusted from time-to-time as needed. You can’t separate the two.
But but capitalism, invisible hand blah blah blah
“It would be scary for these non-productive assets to decline in price; therefore we must ensure they continue to climb in price quicker than inflation/wages.”
Can’t see how this could possibly go wrong.
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A 2BR in Docklands is low 400’s
For FHB’s that’s 20k deposit to get in and soon no stamp duties at settlement
15 minute walk to work in the city and even closer for the footy.
Where is the issue?
Because when people were buying them off the plan they were worth…scrap that…valued at $750 - 800k and now only sell in low $400.
With more & more apartments being built in the Docklands & Fisherman Bend area as well as in the city itself there will soon be a dramatic oversupply of apartments resulting in even more downward pressure on prices.
You’d be lucky to find a bank that would lend you the 95% on an inner city apartment because the values are so rubbery.
Did I read somewhere banks are only lending as little as 80% of the value?
- Docklands is a ghost town, reminiscent of a dystopian post nuclear war world.
- The units and apartments in Docklands are so badly made that not even foreign investors can see the gain in purchasing there.
- Once you are above the 10th or so floor you are unable to open windows and external doors due to the wind
- They were originally priced much higher and still can’t sell, that sets off an alarm for me
- Please show me a bank that would take a 5% deposit, a majority of FHBs with no to little collateral would need to put down 10%, so it would be $40K.
- 15 minute walk to the city is great if you work there, and also assumes you purchased at the city end of the Docklands where prices are more than 400K
All in all if you were a FHB and needed to save 40K to live in a shoebox with dubious value that has not risen in value during a property boom and still needed >20 mins to get to work knowing that your investment will yield a return, would you buy there?