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Affordable Canberra housing…. so close.

By Sands 15 October 2008 67

Well done on increasing the first home owners grant K-Dudd.   Just when Canberra housing was stabilising and, in some cases, decreasing – you go and f&*k it up by increasing the first home owners grant!

Oh, but not for me – (predominantly, and by most accounts known to me) for the snotty nosed rich kids who can afford it!  Sure, I may have a costly failed relationship – BUT I STILL DON’T OWN A HOME KEVIN!!!  And I have no forseeable option to own one.  I pay more taxes than most of these people, but still can’t get into the housing market. 

Means test it d*ckhead.

What’s Your opinion?

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67 Responses to
Affordable Canberra housing…. so close.
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peterh 1:45 pm 20 Oct 08

what the FHOG will do is reduce the numbers of people who are moving into older homes in favor of the new home concept. This should stimulate the building industry, and provide work for new businesses in canberra. Problem is, there are several builders who are up to their armpits in business now, and couldn’t extend their workforce for a short term contract, they would have to resort to unskilled labour to fill the gaps. the figures for unemployment would go down, but what happens when the contracts end?

The main area that should be assisted to own their own homes are the disadvantaged – if you are living in an act housing property after a particularly messy divorce, raising several kids and currently paying a lowered rental amount, a tailored loan could be crafted to ensure that your costs were the same, but at the end of it, the house is yours, not the government’s.

and the old property can be allocated to someone else, to reduce the number of families on the waiting list.

shame that the govt’s focus is new home buyers. it should be for all home buyers within a certain bracket.

I received the FHOG, after we had bought our property. We are looking for a bigger house now, and the money from the grant which is ticking over in the bank will assist us in some basic renovations.

Then we will move to a larger house somewhere….

jakez 12:35 pm 20 Oct 08

…I must have spartanistic standards about my future dwelling then.

Holden Caulfield 12:11 pm 20 Oct 08

jakez $400K doesn’t get you much these days, but your point is valid for now … just.

Also in response to Clueless70’s post, I do agree and empathise with you in terms of the plight of wanting to be home owner in 2008. Entry level prices are, for the most part, pretty shocking.

Similar to the Berlinas, my missus and I knuckled down and saved every cent we could so that we could buy our first home while our mates were still living the high life. Indeed, we even took out a personal loan to give our initial deposit a bit of a nudge and thank goodness we did. We got in just before the GST, moving into our home in January 2000. Luckily for us, this was also just before the first of the recent property booms.

The rapid rise of property enabled us to use our equity to dabble with an investment property, and if it makes you feel any better our first tenant was of the no paying variety and we were paying two mortgages for far too many months than was comfortable. Now, however, our “unethical” purchase is leased to DHA, so we are providing a roof for a good Aussie “working family” that fights to protect our way of life.

If you’d like any more emotional heart strings to pull, just remember it can work both ways.

I also tend to think that the benefits of investing in property are probably skewed too far towards the investors interests and I appreciate the affect this may have on the first home owner market. But while they are, I’m sorry, but I’m going to use them to my advantage. It won’t last forever.

Besides, as mentioned, we had to take out a loan to borrow our “first home owners grant”.

jakez 11:28 am 20 Oct 08

Clueless, that seems like an extremely convoluted way of going about things. Why do you need a $400k house in the outer suburbs? Do you have a few children?

sepi 10:20 am 20 Oct 08

And someone has to own rental properties (unless the govt moves to managing rentals), or a whole lot of people would have nowhere to live.

A lot of people need to rent – like students or people in Canberra for a few years for a job.

Clueless70, thanks for a well written argument (a bit of a rarity around here). Let me respond to each of your points, given that my opinion differs a bit.

Speculation. Much property investment is not speculative. For example, I have no intention of selling any of my investment properties. Also, investors tend to buy established properties for the best possible price, rather than owner-occupiers who often buy at ’emotional’ prices. Most investors, like myself, are more than willing to walk away from a deal if the price isn’t right.

Debt. People seem to have a fundamental issue with borrowing, despite the fact that if you’re careful, the item you’re borrowing for increases in value over time, while the amount of debt decreases in value over time. This can be used to your advantage by understanding how much you can afford to regularly pay to service debt, then adjusting your purchase to fit. Remember that the amount to pay to service the debt decreases as inflation causes income and costs to rise, and the amount you can afford to pay typically increases during your lifetime. The aim is thus to use debt wisely, to get yourself to a point where you own as asset (such as your home) outright.

Aesthetics. Hoping to achieve your dream home first up probably isn’t realistic for most people. So buy something simpler to start with, then upgrade in a few years time. Also, most properties that are structurally sound can be renovated into very confortable and liveable homes without massive dollars needing to be spent. Of course, if you decide you HAVE to have the best of everything, it’s going to be very expensive.

I’m all for plain facts, hard work and realism. Saving is difficult at any time, and it does require discipline as Mr Vyberlinav8 points out. However, I think it’s a bit disingenuous to argue that in the present housing market, all one has to do to own a house these days is to tighten the belt sufficiently and for long enough.

If you consistently spend less than you earn, and invest the difference, you will eventually have enough cash to get into a property. What you can’t do is have everything else along the way. When Mrs Berlina and I were saving for our first home, we were both earning less than average income. Of course, houses are more expensive now, but this is offset by the fact that you can borrow a greater percentage of the total cost.

clueless70 7:43 am 20 Oct 08

I haven’t been a resident of Canberra where I spent my youth, for many years, but I intend to return to live. That is, when the graph-line of my income and the median housing price there stop diverging steeply. For the moment, I am living in what could be described unkindly as a one-room fibro shack deep in the suburban blandness of south-west Sydney, as I refuse to pay more than $150 per week in rent in order to maximise savings, and my share-house days are over. I am comfortable there, but a nostalgia for those days of having as many as two or rooms in which to live does at times arise.

I’m all for plain facts, hard work and realism. Saving is difficult at any time, and it does require discipline as Mr Vyberlinav8 points out. However, I think it’s a bit disingenuous to argue that in the present housing market, all one has to do to own a house these days is to tighten the belt sufficiently and for long enough.

My objections to the ‘shut up, work hard and save, or get used to renting’ line are three-fold: speculation, debt and aesthetics. For some time the savings game has been a losing game, as a look at the house price-to-earnings ratio will show you. Any amount of strategic saving and scrimping will get those on average incomes nowhere until houses lose, on average, a lot of their current market value. Howard created a tax environment that was friendly to the wealthy and the speculative. Speculate in gold and diamonds if you like, but it is unethical to speculate in housing – as it would be to speculate in the price of water or food. To me the idea of a well-housed individual or family purchasing ‘an investment property’ in the form of more housing is essentially perverse. It creates a social relationship of exploitation between the investor and the prospective buyer, for whom a house is not an adornment but a necessity. Further, most speculation is inflationary since it is driven by irrational desires. Price bubbles form every time it becomes widespread. Please forgive me if, when seen as a potential source of profit rather than a human being, I am unmoved by your failure or success in taking profits from speculative purchase of property surplus to your own needs.

The next problem is indebtedness. At my present rate of saving, I will qualify for a 25-year mortgage in a few years’ time. I might even qualify for a FHOG. This will entitle me to detach one testicle and hand it to a multinational bank. I will have the pick of $450,000 properties in the outer suburbs of Sydney or Canberra that my $400,000 loan lays out before me. I will be obliged to pay most of my income for the next 25 years to the bank at a rate of interest which they are free to manipulate. Seeing the folly of this, I have moved my operations offshore to a tax-free, rent-subsidised environment as of next year, in a desperate attempt to supercharge the savings. From the point of view of mental health, it is a risky move to jettison one’s friends and family to live alone overseas in an alien culture. However, to earn interest on savings, rather than pay interest on debt, seems the wiser of two difficult choices. The housing market is predicted to fall dramatically in the next 4 to 8 years, but who knows? It is in the hands of speculators.

Finally, there is the problem of aesthetics. What would my hard work and savings buy me, in terms of bricks and mortar, in Sydney? A sh*t-brown Californian bungalow with peeling paint, perhaps, its every tiny window turned resolutely away from the sun, rats gambolling in the roof? A poem in textured orange brick with vermiculite ceiling, on a treeless block of walk-up flats? Perhaps a prettified workers’ cottage punctured with skylights in an attempt to brighten what is by its architectural nature drab, poky and cheerless. Canberra has its own swathes of developer-designed rubbish, brick veneer lumps hogging small blocks of land and sitting wart-like in total disregard of climate and aspect. I’m one of those people who notice and are affected emotionally by what surrounds them, and I find the quality of housing that a large loan will buy in any capital city right now is dismayingly poor.

All told, the best plan for first-home buyers in Australia still seems to save indefinitely while living in a tent, and to hope for the current breed of property speculators to… well – die, or sink their millions into stuff nobody actually needs. With the treacly floral offerings of Floriade in mind, may I suggest Dutch tulips.

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