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Housing problems solved by offering sufficiently unattractive houses?

By johnboy 20 May 2009 55

The ABC delivers us a masterclass in spin based governance. Jon Stanhope is proclaiming success for his multi-faceted housing strategy.

The basis for this claim?

    Sixty cheaper house and land packages were offered for sale at the Brindabella estate at West Macgregor, but Mr Stanhope says only a third were sold.

    The Chief Minister says the clearance rate proves the Government’s affordable housing strategy is meeting demand.

So very few people want to by horrible houses at the edge of no-where and your work is done?

And while we’re at it houses around $360,000 are cheap? You’re not exactly on the bones of your arse if you can swing that kind of finance.

Talk about massaging expectations beyond the event horizon.

2 bedroom flats with rent-to-own schemes, now that’s affordable housing.


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Housing problems solved by offering sufficiently unattractive houses?
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Clown Killer 5:20 pm 21 May 09

Weird. My solicitor handled everything, we just turned up signed the docments and left with the keys. Perhaps the solicitor paid it on our behalf and then drew down on the settlement – but that certainly wasn’t my reading of the paperwork.

Ruby Wednesday 5:16 pm 21 May 09

Have the rules on stamp duty changed in the lest couple of years? I bought property in the ACT in 2000 and 2002 (the earlier purchase financed ny ANZ) and we certainly didn’t pay a cent of anything, stamp duty included, until settlement day.

The ACT Revenue website says:

Compliance obligations/requirements

Purchasers or their legal representative are required to lodge the contract for the purchase of the property and pay the duty within 90 days of the liability arising, e.g. execution (signing) of the contract. You should be aware that giving false or misleading information is a serious offence.

The bank and the solicitors, it seems, insisted it had to be done earlier. The ANZ guy said the ACT was the one place where they couldn’t roll in the stamp duty as part of the loan, but who knows.

Clown Killer 12:34 pm 21 May 09

At least according to ANZ, you can’t have your stamp duty financed in the ACT as it is payable prior to settlement and not at settlement

Have the rules on stamp duty changed in the lest couple of years? I bought property in the ACT in 2000 and 2002 (the earlier purchase financed ny ANZ) and we certainly didn’t pay a cent of anything, stamp duty included, until settlement day.

p1 11:14 am 21 May 09

But I look on the first home owner grant in our case as a pretty inefficient way to transfer money from the Commonwealth to the ACT

This was exactly the case for us too. Get money from Commonwealth, give almost all of it to ACT. And at no point did I get a stamp in exchange for that money. False advertising!!!!

Thumper 10:04 am 21 May 09

A mate of mine once took out a presonal loan for a ‘car’. It kind of helped with his intitial deposit when he couldn’t find a ‘car’ he liked 😉

Thumper 10:03 am 21 May 09

But is it a pipe dream to think that maybe, just maybe, the ACT govt will abolish stamp-duty?

Nah mate, won’t happen. There’s big bucks in stamp duty.

AngryHenry 9:45 am 21 May 09

Thumper said :

Angryhenry,

find a place and take the plunge. Buy where you can afford, not what you wish you could have. That will come later. The market is as good as it’s going to get.

I’m hearing you and it’s happening. But is it a pipe dream to think that maybe, just maybe, the ACT govt will abolish stamp-duty?

Long-term paying off a really decent house is no problem for us but in the short-term all the associated up-front costs are a massive hurdle to get over and takes away from all that money we’ve saved for a deposit. With a reduced deposit you get slugged roughly $10 grand for mortgage insurance.

I’ve heard of other people really screwing themselves over because of this.

Ruby Wednesday 7:13 am 21 May 09

As one of these magical first home buyers, we bought a place for $335K (a townhouse in Belconnen, which serves our needs but is nothing flash) with 2 br and *gasp* only one bathroom. We are quite happy with that and are willing to save or improve the place to make it the house we want (installing air conditioning and eventually refitting the kitchen and bathroom, for instance). This idea that all twentysomething first home buyers want a McMansion straight off the bat is, at least looking at the flats and townhouses my friends and colleagues in the first home owner category have bought, a bit of a strange assertion. No doubt there are some who do, but I would be very surprised if it were most.

As for making it cheaper, stamp duty is really the killer. At least according to ANZ, you can’t have your stamp duty financed in the ACT as it is payable prior to settlement and not at settlement. Thus, our first home owner grant went (save for $3K of it) to the ACT government to cover stamp duty. We missed out on the stamp duty exemption by $1K due to a few weeks of acting I had done earlier in the year. (It is also based on a calendar year and not a financial year, so it’s not that easy to work out if you are not a hoarder of payslips and you have changed jobs in that year!) This exemption doesn’t taper, so you were either in or out. Unfortunately, we were out. But I look on the first home owner grant in our case as a pretty inefficient way to transfer money from the Commonwealth to the ACT.

Gungahlin Al 6:09 am 21 May 09

OMG that “industrial estate” off Parkwood Rd is a disgrace. Just been Google Streetviewing it. How is it that the government hasn’t ordered a clean-up there?

OT West McGregor isn’t exactly East Tumut. Lived in Scullin when it first opened up and that’s only 2 burbs over. Besides, on a commute, it’s the last 5 klicks that takes 3/4 of the drive time.

But yes, Mr Stanhope is drawing a VERY low bow with his assertions on this. Perhaps the problem is more their promotion of the sale? Or, as JB said, the product? Things like this perhaps?

Skidd Marx 11:06 pm 20 May 09

i agree with henry angry.

MWF 10:24 pm 20 May 09

I-filed said :

Why don’t first home buyers buy in Queanbo? $250,000 for a 2-3 beddy fibro I think?

Nope. A friend of mine is trying to buy a place at the moment. There is nothing in Queanbeyan for that price that either he or I have found recently. Cheapest house in Queanbeyan atm on allhomes is $319,950 (with an offer already). I am trying to convince him to buy a unit but, as he is a tradie and works a lot from home, he needs a shed to bang and crash stuff about. Can’t do that in a unit 🙁

There were some bargains in Bywong recently, but they have all been snapped up.

I-filed 6:22 pm 20 May 09

Why don’t first home buyers buy in Queanbo? $250,000 for a 2-3 beddy fibro I think?

Thumper 6:07 pm 20 May 09

Angryhenry,

find a place and take the plunge. Buy where you can afford, not what you wish you could have. That will come later. The market is as good as it’s going to get.

MWF 5:40 pm 20 May 09

My parents look fondly back on their young adulthood. Both got paid to go to College (Tertiary) and had Commonwealth Scholarships. Most teachers did in their day. There were no HECS fees to pay back either.

Then they entered a “Land Ballot”. Where Commonwealth land (I believe) was given away to the lucky ticket holders! Both my parents and my father’s brother got free land to build their houses on – WOW. Because they “owned” the land (99 year lease), they didn’t even have to scrounge up a deposit to build their brand new house.

I think my parents own about 4 houses now. All paid off. They are even gracious enough to allow one of my siblings to live in one of their houses and pay them rent.

I honestly don’t get it, it is a very new experience for me and being a fairly logical and reasonable person I find a lot of things with buying a house beyond logic and reason.

The property market (like many free markets) often contains oddities, which are sometimes bargains. The reason property is so nuts is twofold:
1) For most people, it’s a very emotional purchase, and that’s how they treat it
2) Most people seem to end up buying to the very limit of their budget.

but at least it would be all part of the loan, not a separate slug in the guts when you have finalised your finances with the bank.

Banks will typically include costs in with the loan, but just make sure this doesn’t upset your loan to value ration (LVR), so you unwittingly incur (or add to) mortgage insurance.

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