A home amongst the gum trees
A local real estate agent rings me every couple of months asking if I am willing to sell my house. So far he’s tried the ‘look how much you could get’ strategy, ‘the market is moving, you don’t want to miss out’ strategy and telling me he could help me buy another house if I did sell; to which my response was something like ‘and you get two commissions – how does that help me’. He has now accepted that I’m not one of those people that move every few years to ‘climb the real estate ladder’. Although he persists in still ringing me regularly to check that I haven’t changed my mind.
The real estate agent’s actions are logical – his business is the sale of properties on which he receives a percentage of the purchase price – so he’s eager for the price of houses in my area to go up. Clearly the ‘look how much your house is worth now’ sales pitch works, otherwise the agent would be changing the sales patter to something that did work or be out of business.
While the sale and purchase price numbers may be ridiculously high to those who have lived in the one house for decades, the reality is if I was to take up the real estate agent’s suggestion of selling and buying again, I would be doing so in the same market, so the cost difference is relative to the amount of equity I have in the current house. Unfortunately, this isn’t the case to the person entering the housing market for the first time. Politicians also have used the property feeding frenzy to their benefit, claiming at election after election that they will ensure property prices keep rising, interest rates (a loan is necessary for many property ‘investment strategies’) will stay lower and there will be nothing done to alter the favourable taxation treatment given to rental property owners.
Australia has an unholy obsession with property. Effectively a house is somewhere for people to live. It shouldn’t solely be part of an investment strategy that shows regular growth and numerous tax advantages paid for in a large part by those who are forced to rent the property in an environment where they can’t afford to buy their own home. Our housing prices are some of the most expensive in the world.
That’s not to say there isn’t a need for rental properties; it is also a reasonable expectation for the rental property to be a healthy environment at a reasonable value and maintenance is attended to in a prompt and efficient manner. Sadly, that isn’t always the reality. Obviously, private investors generally will not happily make a loss on a property unless it is to make a ‘tax loss’. Even then, the tax loss has to fit a reasonably narrow definition as dictated by The Australian Taxation Office. Yet there are articles in the media on a regular basis discussing the ill-fortune of those that can’t afford the rent, so they are living in their car, on someone’s couch or have to relocate to find something affordable.
There are demonstrated benefits to having a ‘permanent home’. If someone has a ‘permanent address’, there is a greater chance of any underlying health, mental or social issues being addressed. It makes sense really, if the formerly homeless person doesn’t have to expend physical and mental energy in locating a bed for the night, there is a better chance for them to connect and retain engagement with support services. Employers are also more likely to employ people with a ‘permanent address’. Academic research supports the concept.
The problem is that if you have no or minimal income, it is difficult if not impossible to be able to afford a rental property. Anglicare complete an annual rental Affordability Snapshot across Australia and depressingly
Out of 45,992 listings, we found just eight rentals (0 percent) that were affordable for a single person on the JobSeeker payment. There was one listing (0 percent) in a share house that was affordable for a young person on Youth Allowance anywhere in the country. The most generous income support payment is the Age Pension. Yet for a couple living on the Age Pension, just 1.4 percent of rentals were affordable. Finding an affordable rental is even harder for single aged pensioners, with 0.1 percent of listings left to compete for. Many are rooms in share houses that might not be appropriate for an older person.
Working people are hardly better off. A single person working full-time on the minimum wage will find that 1.6 percent of rentals are affordable. Of all the households featured in this Snapshot, families with two parents each earning a minimum wage stand the best chance of finding an affordable home. Even they will only be able to afford 15.3 percent of the rentals we surveyed.
For better or worse, while the federal government has a seat at the table when interest rates and investment strategies are being discussed, social housing is a primary responsibility for state governments. There seems to be little interest in working across the three levels of government to produce any sort of solution, let alone an acceptable one where there is very few if anyone that doesn’t have a suitable roof over their head tonight or any other night.
This month Queensland is convening a forum to discuss how to build the 10,000 additional social homes that are claimed to be needed in the state. The next problem will be getting the materials for the homes as well as overcoming the negative perception of social housing in areas where there is a demand, but no supply.
It’s all very well to continue to expect that property prices will continue to rise far in excess of personal incomes and it’s nice to know that the decision you made to buy some years ago has paid off. However, for those that don’t have a property, the future is looking increasingly dire.
While housing summits and intentions to build 10,000 homes are worthwhile, the Albanese Government could do more in lifting the rental assistance component of various social security payments to a meaningful level so that people can afford to put a roof over their heads and stay there for a reasonable period. All levels of government do also have the right and ability to ‘encourage’ landlords not to choose to either leave their investment properties vacant or only available for short term rentals through strategic taxation levies and so on. Superannuation funds can choose to invest into social housing providers such as BHC rather than fossil fuel or gambling companies.
After all, if a person has a guarantee of a roof over their head for the foreseeable future, they can put some effort into finding appropriate healthcare, employment and social services so they can contribute on a meaningful level to society. A society that looks after those that are less well-off is a society that looks after everyone.
What do you think?
This article was originally published on The Political Sword
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Shakespeare had Marcellus uttering the phrase ‘Something is rotten in the state of Denmark,’ in his most-famous work, Hamlet. The reference was to corruption, but it seems to be applicable to many other aspects of our lives in these dog-eat-dog competitive societies that are the characteristic manifestation of free-market economic regimes that underpin modern laissez-faire capitalism.
Margaret Thatcher, one of capitalism’s outspoken champions, infamously noted that “[they] are casting their problems at society. And, you know, there’s no such thing as society. There are individual men and women and there are families. And no government can do anything except through people, and people must look after themselves first. It is our duty to look after ourselves and then, also, to look after our neighbours.”
Without knowing the numbers, it would be interesting to compare how this country’s housing crisis measures up against other developed countries; not only north American but European and Asian. My impression from almost a decade of living in north Asia was that there was essentially almost zero homelessness. South Asian countries, less affluent, may be entirely different.
And I’ve read, but again, cannot quote numbers, that in many parts of Europe, a much larger percentage of people live in rentals their entire lives, and that rent rates are governed so that landlords cannot keep increasing the amount asked for the tenants.
The housing crisis in Australia seems like a bleeding ulcer, corrosive, deadly, affecting thousands, widely reported and commented on, yet seemingly without much concrete action to address the issues. Why? Why is it so difficult to knuckle down and move on what is likely to be one of the greater causes of distress to so many people in this otherwise affluent nation?
I’ve had periods in my life when I’ve been homeless, or lived in broken-down accommodation such as a fifty-year old caravan with broken windows and chronic insect infestation, or a brief period where I expected to be living in the open, sheltered under a tree or within bushes. It sucks, it’s truly awful, and in many ways it’s a disgrace that we tolerate this fate for thousands of our citizens, most of whom have fallen into poverty traps through no fault of their own. We need to do much much better, as a wealthy nation. If the government can have a discussion about a multi-billion dollar investment in military equipment, surely it behoves them to do the same for the health and welfare of its citizens.
its this crazy idea that the market will correct itself. Yes it will if your going to provide tax relief and incentives, thats the direction the market will correct to. Make living on a pension hard by screwing the oldies down means we all want to plan for our retirement by making money. Naturally governments play into this fear by actually encouraging us down this path. So now we play by rules of the “jungle”. Hello, its not rocket science. Neo liberal propaganda has worked a treat and we all play by the rules. Smug behind our proverbial picket fence. Then we get the fuckedshoein policy of Super for everyone to placate the masses because we have all bought in. How much of that pie is wiped from our pockets? The libs are apt to say its our money, but they sure did want to put their hands in our pockets. Not to mention the few thousand i paid every year for my super’s tax returns. Fuck me, governments are supposedly for the people not some esoteric economic manager of last resort. Swanston st in Melbourne had a lot of homeless people in plain site when i was last home, I dread what i will find next month.
Much like the health system, “we” think that what is happening now in the housing sector is a more recent aberration. It’s true that Covid has led to some anomalies, but the sad reality is that in both areas, both critical areas that are a barometer of, or shine a light on, how well, or how badly, our society looks after those that are in the bottom rungs, what is happening now is only the logical outcome of years of massively flawed, perhaps even corrupted, government policy settings. Ramping is the result of years of the public health system being strangled to push more profits into private hands. In property, “now” is the result of aggregating years of policy settings that have relentlessly driven up the price of housing. From flawed RBA interest-rate decisions to flawed home-buyer and home renovator grant programmes through to the evisceration of public housing, in part the result of the growing power of the property lobby that has been able to arrange for billions of dollars of wealth transfers from governments – the “grey” gifts that result from favourable zoning approvals. The relentless tide of gentrification that has led to many working people being unable to afford even the most basic of decent accommodation. Housing estates redeveloped with minimal regard for social housing – where you can be sure even if a government or council wanted more social housing, the developer was only interested in less. Ever larger homes for smaller families on miniscule blocks. Ever wonder why SUV’s are popular with manufacturers? The answer is profit – they are bigger vehicles (I won’t call them “cars”), so we will pay more for them – it’s a simple commercial exploitation of a human frailty. We will also pay more for bigger houses. “We” as a society have happily allowed governments to arrange for massive wealth transfers to the owners of property. Some of “us” care about that; nowhere near enough of “us” care about that and the social damage that is done to the growing numbers priced out of home ownership and event decent affordable rental. The accumulated malaise in health and housing is now such that no short-term policy, however well meaning, can fix the compounding problems caused by past governments.
Tonight’s 4Corners left me feeling sad and angry watching a young mother with two children working six days a week having to live in a room temporarily provided by her employer because she had to leave her rental property that wax so dilapidated it was a health risk with mould and asbestos. Also the Mayor of Bellingen frustrated that the State government was going to demolish a housing estate with no plan for rehousing the tenants while developers make a whopping profit with only 9 extra social housing properties extra. Coffs Harbour is populated with homeless people living in the surrounding bush. We are becoming a third world country.
I bought my first house in Darwin in mid-1984 for $64,500 for approximately 3 x my income. It was a basic 3 bedroom and one bathroom Housing Commission home which which I initially rented, then – as a permanent teacher, bought under our ‘sale of government homes’ scheme. At that time I had 3 children, 2 of whom were living at home, and one of those was studying at Flinders.
I paid off the mortgage in 9 years and then saved at the same rate for the next 3 years an amount over $26,000, used then to make major renovations.
I lived there for 30 years, sold it for $540,000 and bought a 2 bedroom unit in a retirement village in late 2014 for $450,000.
I was fortunate in having a Comsuper, defined benefit super scheme but I am far from wealthy.
Today’s housing standards are ridiculously high if you do not yet have a family. I have never had more than one bathroom and only now have a covered car port.
I grew up in England through WWII and all its rationing and shortages!
I agree with all the sentiments expressed above.
When I started in real estate investment 40 years ago I was surprised that rents were less than expenses yet I still made excellent financial returns. ”Just do as the big boys do and you won’t go wrong.”
However, why should negative gearing principally profit the huge income earners to the detriment of working class families struggling to survive on casual wages and less?
REMOVE negative gearing.
.
Maximum one house for investment purposes.
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REMOVE buyer citizenship enticements for North Asian purchasers who currently boost market prices for Australian citizenship.
.
Introduce as state government policy a social housing building programme including regional centres, not just metropolitan tower blocks.
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Encourage super schemes to finance social housing ….. this is already happening with investment companies while personal bank interest rates are so low with a huge spread to housing borrowers.
Little Johnnie Howard and the Liarbral Crookes & Co have provided the worst example of government for the benefit of Australian voters since 1901. It is time to ”encourage” foreign owned multinational corporations to pay for the privilege of trading in Australia, encourage ”the corporate bosses” to pay their fair share of the cost of service provision and time for government to return Australia to a caring egalitarian society.
The saddest thing to see is young couples with children attending a house auction and quickly realizing that the indicative pricing was way off the mark and was used purely as a cynical bait.
They see well heeled investors bidding up the price with the full knowledge that they can write off their overspend against negative gearing tax offsets.
They leave the auction disillusioned and realizing that they face a future as renters, tenants of investors who ultimately will flip their properties and gain capital gains tax concessions.
As a society, we owe it to our younger generations to give them every assistance to own their own home and hopefully Labor will address this challenge.
I almost choked on a mouthful of coffee from laughing with the reply from Ukrainian diplomat Andriy Melnyk to Elon Musk’s “peace proposal”.
GL: Is it so funny? I don’t really approve of Musk and his shenanigans, but let us take his proposal at face value. What is so wrong with it? He is suggesting a trade off. The territories he might be suggesting as a trade-off are the ones that already tried to declare independence from Ukraine because they are mostly Russian-speaking. We know they exist, right? They are now the ones that Russia has said they will annex, as a result of the “referendums”, fraudulent or not.
totaram: Yes… but the disputed territories over which much life has been lost pre February 24 are a sub-set of what Putin has just illegally “annexed”