God the housing shortage in Canberra and Australia is annoying.

Maxwell 15 January 2012 104

This is a dead set joke. Don’t try and tell me it has always been like this – I wasn’t born yesterday. Around the year 2000 housing was CHEAP and PLENTIFUL !

I think what happened was around 2006 – 2011 all of the kids of the baby boomers started leaving home and getting jobs and all of that stuff and this created a mini ecoomic boom but also there wasn’t enough housing on the market to cope.

Think about it, in 2004, you had 3 kids at home, 2 at university, then in 2007 they both up and moved to canberra or got jobs in their own towns/cities and wanted to rent a place.

What is the main type of housing being built at the moment ? Apartments. Who wants apartments. Young people. Says it all really.


What's Your Opinion?


Please login to post your comments, or connect with
104 Responses to God the housing shortage in Canberra and Australia is annoying.
Filter
Order
« Previous 1 4 5 6
Bramina Bramina 8:26 pm 20 Jan 12

devils_advocate said :

NoImRight said :

No I didnt call anyone lazy. How do you get that out of that quote? I suggested they didnt want to do what it takes to get what they want. A subtle difference perhaps but a difference. Bit too close to home ( see what I did there?) perhaps?

While I don’t purport to speak for my generation, I think this post hits the nail on the head – it’s not laziness, it’s just a different attitude toward consumption and money (note I said “different” – not neccessarily wrong).

I suspect that high housing prices even play a part here. As several people have said here, there was once a time when young people saved hard to buy a house. It was the done thing.

But I suspect many young people these days see owning a house as an impossible dream. Since there is no need to save, they consume.

arescarti42 arescarti42 7:40 pm 20 Jan 12

You make a pretty reasonable argument VYBerlinaV8, just a couple of points.

VYBerlinaV8_is_back said :

For those who remember me, I’m one of those evil property investors everyone hates, and have been for some time.

There is nothing inherently wrong with investing in property. What is destructive is where people make speculative investments because they think the capital value of property is going to go up (due to warping of the system via negative gearing, tax incentives, etc or a “better get in quick, before it is too late” type mindset).

VYBerlinaV8_is_back said :

The time when property prices were really tested was in 2007/2008. Government stimulus and drops in interest rate not only propped up the market, but caused it to increase. In 2007 the western world was going to be reduced to a smoking desert. Did we see a crash? Nope. Australia currently has low government debt and plenty of room to move on interest rates.

You have to appreciate that Australia didn’t avoid what happened to the rest of the world so easily, it took the US Federal Reserve bailing out NAB and Westpac to the tune of $5 billion so they wouldn’t outright collapse, an Australian government guarantee on our banks so that overseas lenders would still lend to them, $50 billion in stimulus in Australia, and half a trillion dollars in stimulus in the number one buyer of all the stuff we export (China).

That was what was needed to see that Australia didn’t stumble during the GFC. Now that all the stimulus has worn off, the world (and also Australian) economy doesn’t look so crash hot. The question you need to ask yourself is if something else happens (e.g. a slow down in China, global credit event caused by the shitstorm unfolding in Europe, etc.), is there the financial means and political will to see that we dodge the bullet again? I would suggest possibly not.

As for Australian government debt, it is true that it is low enough to not bother talking about. The elephant in the room is the debt held by private citizens. Australians lead the world in personal debt, we have way more debt per person than the Americans or any of those basket case countries in Europe ever did, and it poses a considerable risk to our economy.

VYBerlinaV8_is_back said :

5) Tradies now earn so much that the cost of building a new dwelling is huge (compared to 10 or 15 years ago). As such, some of the money that would have chased new stock is now chasing existing stock.

Construction costs haven’t actually increased all that much over recent years (see link below), and the amount they have risen by can mostly be explained by the fact that houses have grown a lot bigger and contain more costly inclusions (e.g. air conditioners, granite bench tops, home theatres, etc) in recent times.

http://dl.dropbox.com/u/3827353/Housing%20Graphs/ScreenHunter_03-Aug.-17-21.11.gif

devils_advocate devils_advocate 2:01 pm 20 Jan 12

NoImRight said :

No I didnt call anyone lazy. How do you get that out of that quote? I suggested they didnt want to do what it takes to get what they want. A subtle difference perhaps but a difference. Bit too close to home ( see what I did there?) perhaps?

While I don’t purport to speak for my generation, I think this post hits the nail on the head – it’s not laziness, it’s just a different attitude toward consumption and money (note I said “different” – not neccessarily wrong).

Many of my friends earning $100k+ don’t have their own homes, and in my humble opinion their time preference for consumption is large – that is, consumption is heavily weighted towards the present.

I view myself as an exception because I have always had a pathological fear of being poor, as well as a fear of credit; was still a minor when I started my undergrad in law and finance and therefore feared banks before I was contractually capable of dealing with them; and worked in consumer credit regulation, so saw the worst of how banks deal with consumer. So I don’t really have healthy attitudes toward money or banks.

My choices were different to others I know, but certainly I don’t think they’re lazy, just different priorities. And they all seem happy with their choices. The difference is, I wouldn’t abide any of them whinging about the outcomes of those choices or begrudging me any of my “success” (narrowly defined for the purposes of this post) on the basis that it’s anyone’s fault other than their own.

NoImRight NoImRight 12:58 pm 20 Jan 12

chewy14 said :

NoImRight said :

Yes I can point to where people have complained that house prices arent going up like they used to.

Well do it then. I’m sure I’ve never said anything like that.

NoImRight said :

I have suggested bleating about something you dont like and then demanding someone else pays for it and fixes it for you is not really a practical solution.

I’m assuming you can point to where people have said that someone else should pay for it? Right? I mean you like comments with real content don’t you?

NoImRight said :

The only consensus seems to be some people cant afford everything they want right now and their solution is someone else should fix it by making those that did work for it and can afford it give it away to them. No one seems to want to consider making sacrificing a little and working to achieve something. Thumper is right suck it up, save and buy what you can. If you choose not to well spend some time in the room of mirrors if you want someone to blame.

No, you didn’t call anyone lazy at all.

I’m sure with your A grade grasp of economics you can put together a good argument that refutes a few of the links arescarti and others have provided in this thread? Or are you limited to wild generalisations and making stuff up?

Settle down Angry of Narrabundah its just the internet its not going to get you laid. In any case Ill try again.

TBH its back a few days ago and I really cant be bothered finding it.Its dull enough reading lengthy “why me?” rants once let alone twice. It may even have been one of the other interminable threads on this subject that seem to be popular now.You can believe me or you can look for it yourself. Or can say I made it up if that helps.Ill still be right;-) In any case where did I say you said it? Are you the elected leader now? Or has that damn Lady of the Lake been at it again? Others have been jumping on this jolly bandwagon too you know.

“Others pay for it”. Again its spead over the forum and I dont intend to spend my day going back over it I have useful work to be getting on with. To summarise though some have claimed the Government should provide more support for first home buyers.Where does that money come from? (Actually Im not against a rethink and improvemnt to support for FHO) The bubble fanciers are also eagerly awaiting divine justice falling on those that have dared to already buy and claimed they cant wait to see house prices plummet 50% or some other reasonable figure. In both these cases it would seem they are quite keen for someone else to foot the bill wouldnt you say?

No I didnt call anyone lazy. How do you get that out of that quote? I suggested they didnt want to do what it takes to get what they want. A subtle difference perhaps but a difference. Bit too close to home ( see what I did there?) perhaps?

What links have I suggested needing debunking? I dont recall getting too much into the economics of this more the mindset of those railing against the dark. I dont think Ive made anything up either but I guess for some some cold reality can seem like fantasy or a generalisation. Take it however you will.

chewy14 chewy14 12:11 pm 20 Jan 12

NoImRight said :

Yes I can point to where people have complained that house prices arent going up like they used to.

Well do it then. I’m sure I’ve never said anything like that.

NoImRight said :

I have suggested bleating about something you dont like and then demanding someone else pays for it and fixes it for you is not really a practical solution.

I’m assuming you can point to where people have said that someone else should pay for it? Right? I mean you like comments with real content don’t you?

NoImRight said :

The only consensus seems to be some people cant afford everything they want right now and their solution is someone else should fix it by making those that did work for it and can afford it give it away to them. No one seems to want to consider making sacrificing a little and working to achieve something. Thumper is right suck it up, save and buy what you can. If you choose not to well spend some time in the room of mirrors if you want someone to blame.

No, you didn’t call anyone lazy at all.

I’m sure with your A grade grasp of economics you can put together a good argument that refutes a few of the links arescarti and others have provided in this thread? Or are you limited to wild generalisations and making stuff up?

poetix poetix 11:56 am 20 Jan 12

RedDogInCan said :

Grail said :

Stop breeding. Two children is too many. One is not quite enough.

Good God, Gen Y is bad enough. Can you imagine how horrible an ‘only child’ generation would be!

Hey, sometimes that just happens. Not all ‘only’ children are horrible.

RedDogInCan RedDogInCan 11:29 am 20 Jan 12

Grail said :

Stop breeding. Two children is too many. One is not quite enough.

Good God, Gen Y is bad enough. Can you imagine how horrible an ‘only child’ generation would be!

NoImRight NoImRight 11:23 am 20 Jan 12

chewy14 said :

NoImRight,

If prices steady or keep going down for a few years, then yes affordability will increase. Hopefully the government will stop introducing new owner incentives to prop them up.

And can you point to where people have been whinging that prices aren’t going up like they used to?

I think the only consensus seems to be that property spruikers will continue to chant their
“I worked hard, you’re just lazy, things haven’t changed, property always goes up” mantra no matter what evidence is put before them. Just promise us you won’t be back here blaming the government if property prices go down or interest rates go up?

If I don’t buy a house, then I won’t be blaming anyone because I don’t actually need to. You do realise property isn’t the only investment class right?

Sigh.Sarcasm as a substitute for content is so 2011.

Lets see if I can answer your questions in order

Yes I can point to where people have complained that house prices arent going up like they used to.

No one has chanted this mantra of yours yet that I can see. Myself Im quite sure I havent said property always goes up your lazy etc. I have suggested bleating about something you dont like and then demanding someone else pays for it and fixes it for you is not really a practical solution.

No I wont be blaming the Government if house prices fall or interest rates rise. Unless for some bizarre reason its their fault. That same caveat doesnt seem to apply to those beating their chest and tearing their hair right now it seems as nearly every demographic has been trotted out as being the villians denying you your rights to own stuff you cant afford.

Im am aware of many investment types. Yours possibly involve Nigerian Princes given your obvious grasp of the subtleties of economics? Since this discussion seems to be about housing though perhaps its best to focus on that for now. 😉

Chop71 Chop71 11:03 am 20 Jan 12

The gumbymit has been doing OK out of this by increasing land values (for rates) by 20,30 and 40%. 2011/12 increase of 10.37% seems excessive when we are all told to expect the BIG CRASH>

2002-2003 $65,000 30.00%
2003-2004 $97,000 49.23%
2004-2005 $131,000 35.05%
2005-2006 $131,000 0.00%
2006-2007 $137,000 4.58%
2007-2008 $159,000 16.06%
2008-2009 $198,000 24.53%
2009-2010 $198,000 0.00%
2010-2011 $241,000 21.72%
2011-2012 $266,000 10.37%

chewy14 chewy14 10:59 am 20 Jan 12

NoImRight,

If prices steady or keep going down for a few years, then yes affordability will increase. Hopefully the government will stop introducing new owner incentives to prop them up.

And can you point to where people have been whinging that prices aren’t going up like they used to?

I think the only consensus seems to be that property spruikers will continue to chant their
“I worked hard, you’re just lazy, things haven’t changed, property always goes up” mantra no matter what evidence is put before them. Just promise us you won’t be back here blaming the government if property prices go down or interest rates go up?

If I don’t buy a house, then I won’t be blaming anyone because I don’t actually need to. You do realise property isn’t the only investment class right?

VYBerlinaV8_is_back VYBerlinaV8_is_back 10:37 am 20 Jan 12

It’s been a while since I’ve posted, but this thread has made me decide to join in again.

For those who remember me, I’m one of those evil property investors everyone hates, and have been for some time. Several years ago I guessed that we would enter a period of stagnation, and I think that is what we are seeing now. Top end property has definitely fallen off in price, but median and low priced dwellings don’t seem to be changing much. Data from several sources suggests that Canberra (both houses and units) has changed little in the last year, which due to inflation means prices are sagging a bit. I’d expect we will see the same for several years, during which time incomes and and other prices will play catch up.

I don’t think we are going to see a spectacular crash, for several reasons:
1) Employment is unlikely to drop through the floor in Canberra. Every story about a public service ‘razor gang’ is augmented by comment about such cuts being through attrition rather than redundancy.
2) About two thirds of the population live in a home they either own or are paying off, so government will generally act to appease this group.
3) The time when property prices were really tested was in 2007/2008. Government stimulus and drops in interest rate not only propped up the market, but caused it to increase.
4) Canberra still has high levels of expensive dining and entertainment – until this drops off, people have disposable income that could otherwise be spent supporting housing (although I’ll admit it’s not a nice concept).
5) Tradies now earn so much that the cost of building a new dwelling is huge (compared to 10 or 15 years ago). As such, some of the money that would have chased new stock is now chasing existing stock.

Thinking back 15 years or so the govt of the day reduced public service numbers. Did we see a crash? Nope. In 2007 the western world was going to be reduced to a smoking desert. Did we see a crash? Nope. Australia currently has low government debt and plenty of room to move on interest rates. We also have the ACT govt’s approach of trying to sell a postage stamp sized parcel of land for a very high price, meaning our shortage is not going to be fixed any time soon.

For those people who want to own but don’t, I’d suggest saving now, because over the next few years there will be definite opportunities to buy. Unfortunately a lot of stock for sale at the moment seems crappier than usual, but be patient. When you do find something you like, move quickly to put in an offer and get it off the market.

Grail Grail 10:28 am 20 Jan 12

chewy14 said :

People are simply suggesting that the government should stop propping the housing market up with reduced supply, extra incentives and tax breaks which end up in the pockets of property owners and speculators. The government’s policies actively work against housing affordability because their noses are deep in the trough.

Don’t forget that we have too many people on the planet and are approaching a point where we will be cutting back food supply by building houses on farming land. One way to address the housing affordability issue is to make fewer people.

Stop breeding. Two children is too many. One is not quite enough.

NoImRight NoImRight 10:16 am 20 Jan 12

chewy14 said :

milkman said :

If property was in a bubble, it would have burst by now. It’s been almost 5 years since the GFC.

If you didn’t notice, we were fairly sheltered from the full effects of the GFC due to our initial position, government intervention and the growing asian economies. We may not be so lucky next time.

Plus as arescarti and others have shown, property prices have already been going down for the last year or so.

If you are correct and property prices are going down then surely thats problem solved?

What gives me LOLs is we have one group complaining that house prices are too high and sub members of the same group complaining that house prices arent going up like they did in the good old days so they cant make the same profits.

The only consensus seems to be some people cant afford everything they want right now and their solution is someone else should fix it by making those that did work for it and can afford it give it away to them. No one seems to want to consider making sacrificing a little and working to achieve something. Thumper is right suck it up, save and buy what you can. If you choose not to well spend some time in the room of mirrors if you want someone to blame.

chewy14 chewy14 9:06 am 20 Jan 12

milkman said :

If property was in a bubble, it would have burst by now. It’s been almost 5 years since the GFC.

If you didn’t notice, we were fairly sheltered from the full effects of the GFC due to our initial position, government intervention and the growing asian economies. We may not be so lucky next time.

Plus as arescarti and others have shown, property prices have already been going down for the last year or so.

milkman milkman 6:59 am 20 Jan 12

If property was in a bubble, it would have burst by now. It’s been almost 5 years since the GFC.

LSWCHP LSWCHP 8:58 pm 19 Jan 12

frannjipani said :

I am so sick of Gen Y whinging about house prices and education costs. Most of them live at home while saving for a deposit or while going to uni.

Data point. I know a couple who have two employed adult children in their twenties living at home. Recent quotes from the male parent include “I dunno what I have to do to get my daughter to move out” and “God forbid that my bloody lazy son would come out and help me mow the lawn”, which was in response to my suggestion that he should get his adult son to mow the lawn for him instead of playing X-box games.

I think it’s partially the fault of the parents for being too soft hearted, but mostly the fault of the kids who are taking advantage of their parents kindness.

The kids…I mean adults…have jobs and enough money for cars, iphones etc, so I’m pretty sure they could support themselves independently if they chose to.

arescarti42 arescarti42 8:35 pm 19 Jan 12

frannjipani said :

I am so sick of Gen Y whinging about house prices and education costs. Most of them live at home while saving for a deposit or while going to uni. How real is that? My daughter (Gen Y) moved interstate to University at the age of 18 and has been able to pay off two HECS debts. Admittedly I paid her College residential fees (as a single Baby Boomer mother), but she now pays $460 per week (on her own) for a one bedroom apartment in Sydney. So get real people, the Baby Boomers you criticize are the ones you are sponging off right now. I have even heard of Gen Ys living at home rent free while paying off a house!! And I hate to say it, but Baby Boomers got no Baby Bonus so stop confusing the issues.

Man, there is nothing like wild generalisations and incorrect assumptions for getting in the way of facts and reason, is there.

Bramina Bramina 8:23 pm 19 Jan 12

RedDogInCan said :

Bramina said :

How is housing not a pyramid scheme? Really, anyone please explain.

It fails as a pyramid scheme because receiving payments is not primarily for enrolling other people into the scheme. Your attempt to force fit the property market into the pyramid scheme model ignores the fact that once you sell your property, you are effectively out of the scheme meaning there is no ‘pyramid’ hierarchy which is the distinguishing feature of such schemes. Pyramid schemes work on funnelling payments to the top of the scheme and promising those at the bottom that one day they will be at the top if they pay their membership fee.

Ok, I accept that it isn’t a good fit. (I still think it is a very distorted and informal pyramid).

But it does fit exactly the definition of a ponzi scheme. Wikipedia says:

“A Ponzi scheme is a fraudulent investment operation that pays returns to its investors from their own money or the money paid by subsequent investors, rather than from any actual profit earned by the individual or organization running the operation.”

In property investment people put more money into the market on the premise that prices are going up, but those price increases are not being paid by investment in housing. Not out of real profits produced by selling goods or services produced using that investment.

But really it is an economic or speculative bubble. Wikipedia says:

“An economic bubble (sometimes referred to as a speculative bubble, a market bubble, a price bubble, a financial bubble, a speculative mania or a balloon) is “trade in high volumes at prices that are considerably at variance with intrinsic values”. It could also be described as a trade in products or assets with inflated values.”

Or to be more precise, it is a real estate bubble. Wikipedia says:

“A real estate bubble or property bubble (or housing bubble for residential markets) is a type of economic bubble that occurs periodically in local or global real estate markets. It is characterized by rapid increases in valuations of real property such as housing until they reach unsustainable levels and then decline.”

Wikipedia even has an article on the Australian property bubble.

frannjipani frannjipani 8:09 pm 19 Jan 12

I am so sick of Gen Y whinging about house prices and education costs. Most of them live at home while saving for a deposit or while going to uni. How real is that? My daughter (Gen Y) moved interstate to University at the age of 18 and has been able to pay off two HECS debts. Admittedly I paid her College residential fees (as a single Baby Boomer mother), but she now pays $460 per week (on her own) for a one bedroom apartment in Sydney. So get real people, the Baby Boomers you criticize are the ones you are sponging off right now. I have even heard of Gen Ys living at home rent free while paying off a house!! And I hate to say it, but Baby Boomers got no Baby Bonus so stop confusing the issues.

arescarti42 arescarti42 7:50 pm 19 Jan 12

milkman said :

What about in Canberra? How much have prices fallen here?

Not much really. Down 1.6% over the year and 2.4% since the peak, about $12k off the median house.

http://www.macrobusiness.com.au/wp-content/uploads/2012/01/RP-Data-2.png is taken from the RPData December home price data release.

I feel sorry for the people who took out 97% loans on property in cities like Brisbane and Perth in recent times. If you only had 3% (or even 5%) equity in your home to begin with, a 9% fall is going to leave you owing considerably more than your house is worth.

« Previous 1 4 5 6

CBR Tweets

Sign up to our newsletter

 Top
Region Group Pty Ltd

Search across the site