7 September 2006

ACT Housing the most affordable in the country?

| johnboy
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The Chief Minister is claiming that the ACT has the most affordable housing in the nation.

Now before the reality shear consumes your mind It’s worth scrolling down the page and seeing where the statistics came from. It’s the Real Estate Institute of Australia’s Home Loan Affordability Indicator and, most importantly it measures affordability on the basis of income.

So because we have higher average wages in Canberra we get to screw the lower income earners extra hard in the housing market.

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I don’t think we Canberran’s have much to complain about in the ‘peak hour’ department. Even in heavy traffic, unless there’s a bingle or somthing, most trips are half an hour or less. Years ago I spent a year living in Sydney. The trip from my place to work was about 8km and it could take over an hour – often for no obvious reason.

I grew up in Queanbeyan, and understand the commute well. The trick is to get going earlyish, although the shortish distance means peak hour is still only perhaps 20 mins to the city. I believe there are plans for improving the roads, but I’m not holding my breath there!

“Also, QBN is closer to the centre of Canberra than quite a few parts of Canberra!” VYBerlina

Queanbeyan’s cute houses seem like a good idea till – have you tried to commute from Queanbeyan to Canberra? There’s a big disadvantage there. The traffic is so slow it must make Queanbeyanites wish they’d bought in Belconnen. Oh. Except the sun shines in your eyes all the way up Belconnen Way in the afternoon. So that’s out too!

I suspect that 5% plus outgoings is the new 20% deposit of old. 5% plus stamp duty, legals, mortgage insurance on say a $320k property would be around $35k a probable saving of around $10k on 10% deposit (assuming the lender lets you off mortgage insurance with that equity) and around $40k less than the 20% deposit of old. Then your looking at say $2k/month in minimum repayments – or a pre-tax income of around $28K that can be committed exclusively to servicing that debt. I guess affordability comes down to what other non-discretionary expenses the household has.

5% + costs is not a good way to start.

snahon, it’s not fear, it’s wanting to make sure I have enough money after each pay to pay for the things I need i.e. food, electricity.

I’ve seen a few on allhomes and some are priced too high. Some are great.

I’ve even thought of purchasing an investment property first (2-3br) just to get into the market, which is also an option.

I’ve even looked outside the ACT and have for several months. It’s amazing that you can buy a 4br elsewhere for the price of a 2-3br here.

Do they want people to stay in the ACT? I bloody think not.

I do think buying is the way to go if you can do it. But I would only buy something I would be happy to live in for the next 5+ years. Property hasn’t appreciated for the last 2 or 3 years, and there is no guarantee that it will appreciate in the next couple. Whereas rates seem fairly certian to go up a bit in the future.


” ..could afford a mortgage too but I want to make sure that I have a decent enough deposit so as to not put myself into a situation I can’t afford. “

If you know you can already afford a mortgage then you have obviously done some homework on loans, mortgages, repayments, etc…(as one would expect of a person with 3 degrees).

So you know how much your family can afford, go and start looking. If you can’t find what you want in that price, then a re-evaluation of what you can afford is obvious.

There are many hard luck stories about how we all shared rooms when we grew up (even as teenagers) and it wasn’t such a big deal as we’ve gotten older, so your family seems to have a few choices available :

1. Find the type of house want, can afford but may not be in a location that is ideal.
2. Downgrade your expectations in your location based on existing market conditions.
3. keep renting and hope that your savings will increase at a rate faster then the housing market until all your personal requirements are met.

Many first time home owners don’t get their ideal house but many are smart enough to understand that paying someone elses mortgage is far worse then living it ‘tough’ and paying off your own asset (that actually appreciates in value).

Also, QBN is closer to the centre of Canberra than quite a few parts of Canberra!

Affordability needs to be considered in the context of expectations. If someone expects their first home to have 4 bedrooms, they should also expect to pay reasonably high $$.

As far as the 2 bedroom units in QBN go, many people might be suprised how good they are. Basic for sure, but lots of them have new carpet and paint, and many have kitchens and bathrooms less than 10 years old. I’m seriously considering buying one as an investment later this year – they are always in rental demand and the yield is larger than many other market segments.

There would seem to be fairly limited supply at the ‘affordable’ end of the market. A quick search of Allhomes indicates that there are about 15 properties currently on the market under $300k – based on a search for freestanding homes with up to 4 bedrooms anywhere in Canberra – excluding Qbn and any property identified as being ‘under offer’.

That’s not a lot of choice and at the top end its arguable that repayments around $1950 a month are ‘affordable’.

Nyssa76, you asked me twice “when would you like me to get another job?” I don’t need you do anything for me. I’m suggesting you should think creatively about money and careers. It seems to me you have the means to accomplish what you desire the only thing that’s stopping you seems to be fear. You only need 5% + costs. Previous wisdom regarding money has changed every day your savings are eaten by inflation and interest on savings is taxed.
El – are you serious? I don’t know what you think a hovel is? I found 2 bedroom units in Queanbeyan on Allhomes.com.au for $170 per week.

Thanks VY, I’ll check that out too.

Nyssa – based on what you’ve said in this thread, it seems to me you may nearly be there. Have you considered taking a loan product that allows you to borrow 100%, but with an offset account, into which you could dump all your savings? That with the grants should give you a fairly strong cash reserve (perhaps a year or more worth of payments in the bank).
Ultimately, if you don’t want to buy a house, that’s your decision. If you really do, I think there may still be ways to set things up that would work for you. I’d be asking a mortgage broker (or 3). And well done on the savings so far.

Mael, he wasn’t in Timor for 6 months. He’s navy not army.

So it’s like $18K (on your figures). Added on to the money I’ve already saved, to which I want more than a 10% deposit, given the current market trends and increasing interest rates. It’s called being safe. I don’t want to put myself or my husband or children into a sitution we can’t afford.

I know all that crap, again, Special G passed it on to me.

Hard done by? WTF? So saving and not taking out a 100% loan is not a good thing?

BTW your “frank financial advice” isn’t needed.

That’s easy enough to say, Joker.

But my 2 bedroom “hovel” costs over $300 per week in rent.

Nys, we are alike in our situations.

I was in the Army and I went to Timor. After 15 years in the military, I finally had a positive bank balance for over 6 months.

So I started from scratch is the message I’m passing to you.

(Which also makes me aware of the Defence Home Buyers Grant – a further $11 grand when I applied, on top of the first homebuyers etc etc)

So go shove your hard done by story towards somebody who really cares, like DHA.

Some basic math:

Add up the following;

Defence HBG, – 11k
First Home Grant, – 7k ?
Whatever you’ve got left from Timor. – 6m tour = $75k – probably minus the cost of a Holden because I’m steriotyping

I would think very hard about rebutting my statements because any further frank financial advice will not be pleasant. Most people that move $93k in 6months tend to hang out in Casino’s or dark alleyways.

I’m already aware that the $93k is subject to several factors – however the point of the conversation is regarding fiscal potential, not actual money in hand.

It shouldn’t be a choice between kids and owning a house for a two income couple.
And kids are not something you can put off forever.
Is real estate still cheaper in qbn?

Big Al- something that stops tennants makeing an offer is money.

The Federal government does not have a considered an developed housing policy and /or programs. They may argue that it is a state responsibilty. If it is a state responsibilty why do the feds keep commenting and throwing money at it- negative gearing first home buyers grant, for example.

Special G, he’s been in around 16yrs and was in Timor earlier this year.

I’m teaching in the private system this year and go back to the govt system next year – with a pay cut…but we won’t go into that.

Thanks for that info, I’ll have to check that out too.

Nyssa, This should be inspiring you to back teachers up with the current wage negotiations. With a substantial pay increase you could work in either public or private schooling and afford your house.

Has your husband looked into the defence home loan. It is $80,000 with about 1/3 interest subsidised by the govt. If he has been in for long enough or has served in a combat zone (almost everyone in defence these days) then it would make him eligable.

The defence loan is currently sourced through the NAB. Don’t bother asking other banks to match it as they can’t.

miz, if they were 5 yrs apart they’d have their own room – under Govvie housing policy.

Big Al, thanks, I’ll definately give that a try.

I laughed hysterically when I heard about the govt’s release of ‘affordable’ land. Out of my reach, that’s for sure! And they wondered why a good proportion was handed in.

It would help if they re-instituted the ACT Housing Trust scheme where tenants could get a fixed interest loan to purchase their house as suggested above by Cityboy. This was abolished several years ago (under Carnell I think).

And Nyssa what more could you possibly do? You are doing everything right but it’s clear that the housing market is an obvious outworking of the phrase ‘to him who has, more shall be given’.

It ain’t easy renting with children – one really needs to be secure and not moving house all the time once they hit school age. It’s unsettling and expensive.

And as for sharing bedrooms: I have two girls sharing a smallish room – standard govie house size with no built-in. Aged 13 and 10, they drive each other – and me – bonkers.

Nyssa – once we’d discussed the possibility of a purchase with our landlord we approached a number of real estate agents – ostensibly masquerading as prospective vendors – and invited them to give us a written appraisal of what they thought the property might achieve. This then formed the basis of our discussions with the landlord … its worth considering.

I-filed, I have 1 boy (7) and 2 girls (12 and 3) – the girls are 9yrs apart, as you can see.

Plus, I take my disabled niece (6) at least once a week. So technically it’s 4 kids.

In the past I have lived in a 2br flat, with my son, daughter and husband.

I have saved – have you not read that – a deposit. The prices just keep going up and I would prefer to have at least a 15% deposit. If that means I’m “stupid” for wanting to have a deposit, given that I have 3 children and don’t want to lose the house within 5yrs of purchase thanks to interests rates, then I’m stupid.

Big Al, I think I’ll ask my landlord re: purchase. Saves on moving costs.

Hey Nyssa, you don’t need a four-beddy when you’re starting out. What is it with aspirational hard-luck stories? My family had five kids and lived in a three-beddy till I was 8, kids sharing rooms – and when we ‘traded up’ to four bedrooms our house was regarded as rather large! AND we were a middle-class family, believe it or not, professional wage earner and stay-at-home mum. Three beds was the norm for a four-child family. The folks Get into the housing market and get two of the kids to share a bedroom. By the time they’re old enough to need a room each you should be able to trade up – or add a bedroom. I knew a family of six (four kids) who lived in a two-beddy heritage house in Reid very happily for years while they saved hard for coastal land. And I know a small family with two kids in a massive house in Tuggeranong. The house is so big they had to buy extra large furniture. they look like elves in a giant’s house.

“What the government needs to do is build properties and lease them to those on low incomes with an option to buy in the future.” …its still cheaper overall to have private investors provide the housing stock and there’s nothing stopping a tenant making an offer on the place they’re renting – that’s how I entered the market – the landlord was happy to make a deal without agents fees and commissions and I got a place I was familiar with and didn’t have to move.

Joker, I have 3 kids and I work fulltime as a teacher. When would you like me to get a second job?

Oh yes I have to mention – hubby’s in the navy so he’s not at home most of the time.

So again, when would you like me to get a second job?

If you’d already read, I have saved money – something equivalent to 10% atm for current housing prices.

Thumper, where’s a 4br for that price? Let me know and I’ll have a look.

Heavs and simto, I can afford my kids just fine and have no debts besides HECS.

I could afford a mortgage too but I want to make sure that I have a decent enough deposit so as to not put myself into a situation I can’t afford.

Most people bust there arse off working to get into the property market. There is a saying that goes “It’s not timing, it’s time in.”

I call getting into the housing market a smart move. I scraped together a deposit and worked about 5 different jobs doing 60 hours per week to do it. Since then housing prices have gone up – good for me. Each person invests their dollars how they want, some chose shares, others property. It doesn’t come without angst as interest rates go up.

If they realeased more land, the houses would not necessarily get snapped up by those with low incomes. Instead they would go to those with a lot of capital, who can out bid the poorer ones. The cause of the problem is in equitable distribution of wealth meaning better ability to exploit a scarce but essential resource.

What the governmnet needs to do is build properties and lease them to those on low incomes with an option to buy in the future. This would transfer assets to those without them addressing the problem.

Mr_Shab, i’m sure people can get a second job with the support of their partner.

I know it isn’t easy, I personally believe housing is due for a severe correction. Have savings and be prepared.

id like to live
under the sea
in an octopuses garden…

Absent Diane4:05 pm 08 Sep 06

not sure about my position on retirement…. got a few priorities in my life that need to pan out first before I choose to go down the route of living for retirement.

Having three kids is where it starts to become a “choice” rather than biology. If you’re finding it hard to make ends meet after the first kid, why go looking for more? (unless there’s multiple births involved, of course).

Early retirement, that is 🙂

retirement AD 🙂

Absent Diane3:43 pm 08 Sep 06

I personally have no reason to buy a house… I pay cheap rent, have no major debts, no kids, earn a slightly above average income… I like to holiday and buy music equipment and various other toys.. the question is.. why would I??

Joker – Nyssa’s got three kids! When the hell is she supposed to find time to work an extra job?

I agree that going to uni is not the only way to get ahead. I have friends who didn’t go to uni that earn a lot more than me.

Hats off to ya for making the sacrifices and living modestly to scrape enought together to get a deposit – how do you think I managed it? But like you, I had the luxury of having no dependants and being young.

Heavs – it’s a little glib saying that having kids is a “choice” like buying a car. You can have all the plans in the world, but the messiness of biology tends to render these plans iffy at best.

Nyssa76, all i hear is people convincing them selves that they can’t do it! Get a second
Job. You don’t need to ride to work it’s just a suggestion.

Mr_Shab, I didn’t go to uni, it’s a misconception that You need to go to Uni to get ahead!
No leave and living in a hovel for three years is What worked for me. Some people may think they’re entitled to better, maybe? In the mean time get on with it!

exactly thumper. It may not be ideal for larger families but its a start nonetheless.

I don’t have kids. I chose not to until I could afford it.
In the same vein I could have bought a house when I was 23 but chose to go overseas and have a good time then. I don’t begrudge my friends who bought a house then when prices were lower because I made the CHOICE to go O/S.

Sometimes life’s tough and you can’t have everything you want. I’m sure you’re stoked with the kids you’ve got. Same as I’m happy with my house.


Might I suggest that even with a 10% deposit, check your repayments and determine what is affordable. As VY has pointed out, once you get a mortgage that you can afford, you get into an environment that

1. You build equity in an asset(for the first decade or two that equity is built around the increase in value more so then your actual contributions).
2. Your families capacity to increase in earnings is generally greater then the ebbs and flows of interest rates.

Although house prices appear to be ridiculous – especially compared to 5-10 years ago, they historically are not going to get any cheaper.

So you either get something you can afford today although not necessarily ideal wait 5 or so years and then re evaluate your financial situation or you continually pay off someone elses rent 🙂

Mael, just to further clarify. My parents divorced when I was 6mo.

Neither own a house. One rents in Sydney, the other in Canberra.

I’ve worked hard for what I have already, so you can take your condescending tone and stick it.

Mael, I left home at 17yo. I raised a child w/o help from Centrescum, went to Uni, got a job, married, had 2 more children and got my Masters.

Spoilt brat my arse.

15% is a good deposit. It’s a shame that the damn prices keep going up or I’d have more of a chance.

Have you seen the prices for a 4br with just the walls, carpet etc?

Heavs, my question to you is: do you have children? It’s a lot harder to save (which I have) when you do have children. Especially if you default on the loan and lose your house.

100% loans are not a good thing. I saw the ad at IMB Tuggers and nearly fell over the people gawking over it and then walking in to ask if they could get one!

To quote my grandfather: “If you don’t have the money – or a good deposit – you shouldn’t do it”

Since you’ve indicated 1975 as a hatching date, you’re not that much younger than me.

VY it was directed towards me.

“That probably sounded like it was directed at you, VY – it wasn’t supposed to, but i’m just a green-eyed monster mocking you and your small mortgage” 🙂 🙂 I wish my mortgage was that small! Although I bought in 2001 (before the bulk of the local increases) I have extended twice to get into other properties. Accordingly, I have a normal sized mortgage but lots of tax effectiveness against what is, admittedly, a very good income (which doesn’t hurt, of course). And yes, the tax environment in Australia – like many western countries – tends to favour the investors and high income earners. BUT, I haven’t always been a high income earner (cleaning the butchery at Woolies at age 16 didn’t exactly set me up for life). My point, I guess, is that getting into the housing market seems to me to be a big hurdle that once you get over leads to more stability (and maybe security) in the years ahead. I’ll be the first to say to make your own decisions – just do it armed with the right information and check what you hear in the media.

I bought a place a year ago today. I’m 28. I’m not on a massive income. Neither is my partner. It’s called sacrifice for the end goal.

We had a 10% or so deposit but all that went on the add-on costs and we had to get the 100% loan. It hasn’t hurt that much – we’ve just had to sacrifice on a few things and kids will be a bit further down the track than we would have initially chosen.

I’m more worried about renters in the coming few years. They are going to get slammed.

Okay, I’ll counterpunch on behalf of everyone.

When did anyone (implicitly or explicitly) say they were above their parents generation? My folks struggled with a mortgage, as shall I.

I take issue with two things:

1. Being lectured that those who were lucky (yes lucky, not smart or prudent) enough to buy before 1999. I’ve met some who assume they are somehow financial geniuses, cause the value of their house doubled in a couple of years. They are using their 2006 pay rate to pay off a ludicrously low-priced (in the current market) house (or houses) in a tax environment that is build around them. Some still have the gall to complain about interest rates.

That probably sounded like it was directed at you, VY – it wasn’t supposed to, but i’m just a green-eyed monster mocking you and your small mortgage.

2. Yet again, being told what a crowd of materialistic spoiled brats my generation are. Some are. Most, like me and my partner are doing without stupid luxuries like holidays, flat-screen tv’s, Ipods, flash cars and expensive clothes so we can help to secure our financial future by buying a house and paying it off quicker than the 30 years we’re permitted.

We both earn good money, and at our current rate of repayment, we will pay off our simple 2 bedroom semi in South Belco by the time we’re 40(ish). We’re currently 27.

Of course, that doesn’t take into account the fact that we might have kids, or one of us might have to stop working for some other reason.

Like our parents did before us, we don’t have any debt beyond our mortgage. However, our Boomers parents didn’t have HECS ripping 8% out of their income.

Take a look at housing affordability stats Mael (I’d cite, but I’m sure you’ve seen them). They can tell the story more eloquently than I can. It now costs a greater proportion of your pay-packet to own a house than it ever has before.

People like me aren’t locked out of the housing market, but plenty more are than ever before; and it’s not solely because of avarice for consumer goods.

Now don’t you go giving negative gearing a bad wrap now JB! It’s the tax deducibility I suspect that your aiming at – negative gearing just means that you control a large asset with a minimal stake – its just that many interpret the ‘negative’ to mean ‘loss’ which then becomes a tax deduction

One of the reasons the Government allows ‘negative gearing’ is because, looking at the full range of options available, allowing the private investment market to drive housing development is a more cost effective way than for the Government to build, own and maintain hundreds of thousands of homes for people who choose or for one reason or another cannot afford to buy their own home.

Tinkering tax deducibility is also problematic because you’d have to attack the very principles of the business taxation base and the notion that a cost incurred in order to create income is a legitimate business expense.

make that ‘market rise’, not risk.

Also, I thought Mael’s comments were general, and not really directed at anyone (but then, I can’t read).

Mr Shab – totally agree. Having a 100% mortgage can be a bit scary initially. And yes, we purchased our main house before the last market risk. In terms of interest rate we are mid market but competitive, we are interested more in the structure of our lending products than the actual percentage number.

I guess the point I’m making here is that owning a house doesn’t come without significant effort. Whilst I agree that govco should do what it can to support people entering the housing market (first home owner and first home owner building grants were great examples), it is ultimately up to the individual. Maelinar makes a good point about what our parents had to do. It’s easy to criticise the baby boomers, but many of them have worked damn hard to get to where they are. They also lived a considerably poorer lifestyle than most of us do today.

Mael – pls clarify who that was directed at.

If it was me, I stand ready to counterpunch.

If the government removed negative gearing it would likely increase rents to compensate the landlords for the loss of tax effectiveness of their investment. Many property investors (myself included) don’t aim for negatively geared properties any more anyway. With the new tax rates, negative gearing doesn’t work nearly as well for ‘Mum and Dad’ investors anyway.

And VY – in the current climate, people are justifiably toey about entering into a mortgage without a fairly serious deposit as a fallback. You argue your position from a position of comfort (i.e, presumably you bought your house(s) at a lower price and interest rate than the current market.

I used a broker – and he was great – but it didn’t suddenly change the fact that my house cost big money (and it’s a small 2br place).

Also – the size of the deposit you can come up with tends to partially determine the interest rate you get offered.

And move to Hervey Bay like all the other whingers who can’t handle the pace of Canberra. It’s coastal, there’s rampant unemployment, and it has one of the biggest centrelink offices you’ve ever seen.

Since you’ve indicated 1975 as a hatching date, you’re not that much younger than me. When I grew up my perception of my parents was that they were struggling with a mortgage through their 30’s, exactly where you are now.

Are you saying you’re above your parents in some way ? Should they have provided more for you ? Heck – should they have brought you a house that you can live in scott-free with no obligations ?

If the federales would do away with negative gearing for all but the first home it would get the small speculative investors out of real estate and into something more productive for the nation AND reduce the demand for real-estate (and with it the prices)

It’s just a shame it would cream a vociferous section of liberal voters

Fair enough Mr Shab. In terms of gearing your life around owning, though: would you consider exchanging 3 years of very simple living in exchange for home ownership for the rest of your life? Don’t forget, once you buy that first home equity starts accruing and the amount you pay as a portion of your overall income reduces over time.

Joker – that’s well and good, but people with kids, or who didn’t go to uni don’t have that kind of option.

You shouldn’t need to have to take no leave, live in a “hovel” for three years and get a well-paid job that you live close to to afford a basic house.

Take Nyssa – perfect example. A dual income family (one of whom is a teacher) should be able to afford a house. It doesn’t need to be a palace, but people like her should not be frozen into renting.

Now, I’m pretty sure I’m going to come across as someone with an inflated sense of entitlement, but I would disagree. It’s from a viewpoint of simple economics that I would argue that people need to own their own houses. People need to make certain sacrifices to own a house (I have), but you shouldn’t need to gear your entire life around affording a place to live.

Nyssa, just saw your last post. You don’t need 15% any more. You can do it with zero deposit and about 5% for costs. My sister did this, and doesn’t pay an exorbitant interest rate. Use a mortgage broker – I have bought 3 places using one.

Joker has the right idea. My wife and I lived in a rented shoebox for 3 years while we saved (yes, saved) for a house deposit. It was a bit crummy for a while, but has proved to be well worth it.
I am the same age as Nyssa.

Joker, yes I can see myself riding to work, dropping 3 children off at school and daycare.

The only “debt” I have is HECS. I don’t owe money to anyone. I have savings, but still it isn’t enough as every time you get to the 15% (at least) deposit, the bloody prices go up again and so it starts all over again.

Living in Canberra is not cheap, renting is abysmal and people have to live here.

When will the Govt get the drift – more people = more money coming in = better economy. Not – raise land prices for a handful of people.

Buying a house isn’t easy, this is what I did on a single income.
Pay off all debts ASAP! HECS etc
Live in a hovel for three years
Change jobs after two years take no leave and collect the holiday pay.
Don’t buy anything new or on credit
Buy close to your employment and ride a bicycle to work

The gov may have released some land cheaply but I don’t think there were too many lots that were actually available through the ballot ?

If houses prices continually increase, then affordability is decreased hence the number of renters increase and subsequently rental properties increase in rent amounts !

Gotta love spirals 🙂

10yrs ago I was 20 and was at Uni.

The way things are going, I’ll never be able to buy a house, even on two wages.

If the economy will suffer so badly with the cost of land dropping, why has the Govt released “cheap” land for low income earners?

Seriously, how many low income earners can afford to buy in Canberra even now?

Anyone who was born after 1975 is effectively screwed, that is, unless they are a rich bugger.

I won’t pay off my HECS debt for another 5yrs at least, and by then, the house prices would have soared again.

So the baby boomers can still enjoy a home of their own, no HECS debt and, for some, a bloody Govt pension.

If the Govt wants to get people to live in Canberra, they have to do something about the price of land here. They have to make sure schools aren’t closed – a great deterent to people with young families.

Makes me want to move elsewhere.

Wasn’t there a Govt scheme to ballot cheaper blocks in subdivisions like Wells Station to first home buyers and lower income families – I’m sure I read somewhere that they had trouble getting enough people to take up the offer.

VY I’ve read about the predicted rental increases too – I think it was in the W/end Oz.

woops without adversely affecting the economy I meant.

Thats it VY, we want it all and we want it now !!!

Trouble is, land prices (on new estates) are quite expensive already so add the cost of construction and all of a sudden you have a 3 beddie dog box costing over $400K. Look at nth watson, etc.

Mind you these dog boxes are still larger then most houses built a generation ago (they just have no yard).

The influence the housing market has on the whole economy (directly or indirectly) is such that it is difficult for gov to release large land parcels at relative cheap prices with adversely affecting the economy.

I read recently (I think it might have been Australia Property Investor) that rental costs are expected to rise around 40% over the next four years, based on several analysts research. That sounds like a lot to me, but it does indicate which way things are headed. The local govt has got themselves into a bit of a spot because if they make land cheaper then they could crash the local property market, leading to low property values, and much lower rates. There are other effects also.

It’s all consistent with constantly declining housing affordability in western countries. That said, most peoples’ idea of a house is of a much higher standard than the expectation of a generation ago.

It isn’t JUST this government, though, it’s a worldwide phenomenon. One of the things I noticed in watching “49 Up” was that participants commented on how hard it was to buy a house nowdays in Britain.

Ah, you’ve got to love the ACT Govt, they really know how to screw the little guys.

Housing affordability? Hell, I can’t afford a house of my own and it’s bullshit. It’s a piece of expensive dirt covered by bricks and mortar.

The Govt needs to check itself on the cost of land, they tax us enough (and still can’t do it right) yet they want us to pay more.

Live in Canberra? Yeah right, lower the cost of land prices and people might actually buy a house and free up the rental market – god knows it’s a bigger bitch than a mortage atm.

You are correct Johnboy about ACT Housing continuing to ‘screw the lower income earners extra hard’. I live here, I pay tax (on practically everything as I don’t earn enough to save much, so proportionally high GST). Everything here is user pays with no recognition as to how many people are relying on the one wage. Now my rent has gone up to full, it’s hardly worth my while working (APS 3) at all. They want me to pay more to get my kids to school as they are closing the local one; travel further to a library (I believe they are closing several); and are now telling me that I risk being evicted if I don’t get two weeks’ advance (full) rent to them pronto.

House price affordability has been steadily declining for many decades, and will continue to decline. This has happened overseas, and will happen here. That said, affordability will still fluctuate, but in the longer term property prices will still trend up.

Bottom line – do whatever you can to try to get into a place of your own, because it’s not going to get any easier…

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