New housing crisis?

johnboy 2 March 2012 24

Liberal leader Zed Seselja is banging the drum on housing affordability:

The number of ACT dwellings approved for building has plummeted by 60 per cent in trend terms since June 2011, while the average cost of a median priced home in Canberra has skyrocketed to the nation’s highest at $505,000. This comes after information obtained by the ACT Opposition shows that the average first home in Canberra now costs over $400,000 for the first time. ACT Opposition Leader Zed Seselja said these figures show the extent of ACT Labor’s mismanagement of the housing market.

“These figures demonstrate just how difficult it is for first home buyers to enter the market, with a median home in Canberra now the most expensive in the country and $30,000 more than Sydney,” Mr Seselja said.

“Worse, ACT Labor has only recently acknowledged it has created a “two class Canberra? where people who are not in the property market are facing the very real possibility that they will never be able to afford a home.

“Longer-term statistics also show building approvals have fallen by 60 per cent in trend terms since June 2011, since ACT Labor placed a $50,000 tax burden on units.

Unhappy as they are with the change of use fees it’s hard to believe developers will stay on strike if the prices are rising.


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gazket gazket 11:24 pm 07 Mar 12

“The most recent HIA affordability index release shows that housing affordability in the ACT is the highest it has been since the June quarter, 2010”

That would be because the pollies and their servants just gave themselves massive pay rises so it distorted the figures. how is 400k all of a sudden affordable. HIA and others are full of tripe

Darkfalz Darkfalz 10:08 pm 07 Mar 12

r1 said :

AnimosiTy i do not and never have lived in public housing , and unlike you i dont aspire to

I just bust my ass 6 days a week in a crap blue collar job to pay a fat mortgage and cant stand people who expect a house to miracuously appear from thin air

Housos think a free government house is a basic right. When the government purchases some place and gives to a bogan family, taking it off the market decreases availability and therefore increases prices, while actually making the neighbourhood otherwise devalued because who wants to buy a $500,000 house to end up surrounded by single mothers with screaming uncontrollable kids and dole bludgers.

Darkfalz Darkfalz 10:02 pm 07 Mar 12

It might be we never buy in Canberra. In the meantime we’ll continue to build our savings – hoping to figure out some kind of investment strategy that’s not a huge tax liability, pushing 160k combined income though we’re soon looking at losing 39 cents in the dollar on our savings as opposed to 32 cents at the moment. The advantage of the house is that it’s not losing value like our money is with inflation, but increasing (not at the 10% per year during the boom period) – still, every month rent “seems” a little cheaper because we’re getting a little more interest (falling rates aren’t helping though!). I think the RBA / government is artificially keeping the bubble inflated. I don’t pity people who lose money when the bubble bursts or deflates because their money is in 3 or 4 investment properties – these people are partially responsible for the bubble. Anyway, we’ll keep saving and hoping for an even modest drop in prices if it comes, then we’ll pounce. Otherwise we’re comfortable renting for now.

r1 r1 9:26 pm 07 Mar 12

AnimosiTy i do not and never have lived in public housing , and unlike you i dont aspire to

I just bust my ass 6 days a week in a crap blue collar job to pay a fat mortgage and cant stand people who expect a house to miracuously appear from thin air

Bramina Bramina 2:39 pm 04 Mar 12

As I’ve said before, we’re trapped in an unsustainable cycle of increasing house prices and unaffordability.

It’s a loose-loose situation. If prices remain elevated, future buyers will be burnt. If prices return (collapse) to more affordable levels, home owners will be burnt.

farnarkler farnarkler 11:31 am 04 Mar 12

Time to buy a 1 bedroom flat in QBN for under $200k.

devils_advocate devils_advocate 10:46 am 04 Mar 12

Thumper said :

all thoes lazy bastards living on big fat ASO wages

Funny isn’t it how all the ‘lazy bastards’ seem to earn a good wage while the ‘hard working, salt of the earth’ don’t.

I wonder why that is?

Don’t bother wondering – it’s a windup/troll, and one full of internal contradicitions at that.

Thumper Thumper 10:23 am 04 Mar 12

all thoes lazy bastards living on big fat ASO wages

Funny isn’t it how all the ‘lazy bastards’ seem to earn a good wage while the ‘hard working, salt of the earth’ don’t.

I wonder why that is?

Tooks Tooks 9:57 am 04 Mar 12

AnimosiTy said :

OMG don’t even get me started on housing!
I think a good place to start is kicking out all the people how don’t need to be in gov housing anymore… the ones who make decent wages to go find their own -explicit deleted- houses and are livin it easy making the money driving 60thousand dollar jeeps n cars around claiming they arn’t with partners and blushing off us!! where us low income families are struggling away in the private rental market!!! 🙁
I would love a govie place and after the birth of my 1st child and being told we were eligible n doin all the paper work n traveling back n 4wd to housing in belco(only one at the time) were informed we made roughly $100 out of the bracket to be eligible!!! how infuriating! haven’t bothered with their CRAP since!!!

So your goal is to get INTO govt housing?

BTW, stop typing with your elbows.

AnimosiTy said :

oi r1 … mind ya manners! yes think I jumped the gun n we arn’t actually talking about housing but how I would still like to call out all thoes lazy bastards living on big fat ASO wages paying peanuts in govie places… come to think about it you sound like one of them? or still living at home? dint know what it costs to rent a house today? looking around 375 min a week… doesn’t include gas/elect/ water… let alone phone bills the car I keep running to transport myself n kids, the car rego and insurance… oh yes food?!
us MUMS work -explicit deleted- HARD… have you been a stay at home parent for the last 3 years of your life.. oh and tack on a bother tear or 2 of being pregnant and still doing it all!
my god! so put a sock in in!
I’m having a go at all the bums bluffing off housing taking up all the places when single mums n low income families could really do with the help!

Don’t have kids if you can’t afford them.

AnimosiTy AnimosiTy 7:01 am 04 Mar 12

oi r1 … mind ya manners! yes think I jumped the gun n we arn’t actually talking about housing but how I would still like to call out all thoes lazy bastards living on big fat ASO wages paying peanuts in govie places… come to think about it you sound like one of them? or still living at home? dint know what it costs to rent a house today? looking around 375 min a week… doesn’t include gas/elect/ water… let alone phone bills the car I keep running to transport myself n kids, the car rego and insurance… oh yes food?!
us MUMS work -explicit deleted- HARD… have you been a stay at home parent for the last 3 years of your life.. oh and tack on a bother tear or 2 of being pregnant and still doing it all!
my god! so put a sock in in!
I’m having a go at all the bums bluffing off housing taking up all the places when single mums n low income families could really do with the help!

r1 r1 10:54 pm 03 Mar 12

AnimosiTy said :

OMG don’t even get me started on housing!
I think a good place to start is kicking out all the people how don’t need to be in gov housing anymore… the ones who make decent wages to go find their own -explicit deleted- houses and are livin it easy making the money driving 60thousand dollar jeeps n cars around claiming they arn’t with partners and blushing off us!! where us low income families are struggling away in the private rental market!!! 🙁
I would love a govie place and after the birth of my 1st child and being told we were eligible n doin all the paper work n traveling back n 4wd to housing in belco(only one at the time) were informed we made roughly $100 out of the bracket to be eligible!!! how infuriating! haven’t bothered with their CRAP since!!!

Spewin the kid trick didnt work eh!

What you gunna do if they only offa ya a unit or sumptink!

Getta job or sumptink

AnimosiTy AnimosiTy 8:26 pm 03 Mar 12

OMG don’t even get me started on housing!
I think a good place to start is kicking out all the people how don’t need to be in gov housing anymore… the ones who make decent wages to go find their own -explicit deleted- houses and are livin it easy making the money driving 60thousand dollar jeeps n cars around claiming they arn’t with partners and blushing off us!! where us low income families are struggling away in the private rental market!!! 🙁
I would love a govie place and after the birth of my 1st child and being told we were eligible n doin all the paper work n traveling back n 4wd to housing in belco(only one at the time) were informed we made roughly $100 out of the bracket to be eligible!!! how infuriating! haven’t bothered with their CRAP since!!!

Vix Vix 4:59 pm 03 Mar 12

Not quite on topic but…

I’ve currently got my house on the market – what I find baffling is the number of ‘purchasers’ who have a look, fall in love, check out the DA, etc and only THEN go to the bank to see how much they can borrow!

Surely it makes more sense to do your budgeting before you go looking?

steveu steveu 3:38 pm 02 Mar 12

My gut feeling is the fact that there is less money out there to borrow has an influence on this too – the banks are being alot more responsible on who they lend money to nowadays. Would be interesting to see if the ‘finance refused’ figures were ever kept.

VYBerlinaV8_is_back VYBerlinaV8_is_back 2:52 pm 02 Mar 12

arescarti42 said :

Of course there are quite a few things that could change that story. A credit event in Europe or a slowdown in China and all bets are off IMO.

Absolutely. I think those things are probably already impacting property prices in some parts of the market. The question will be how much of an impact if major events occur. Then it’s anyones guess.

That said, I bought a new property a couple of weeks ago for an absolute steal. There are bargains out there to be had, if you look in the right places.

housebound housebound 2:42 pm 02 Mar 12

EvanJames said :

As for who is to blame or why the price of housing quadrupled while wages didn’t, I don’t know..

It’s pretty well documented now (in chronological order, not order of effect):
1. The Hawke-Keating financial sector deregulation of the late 1980s – initially leading to a massive rise in interest rates, but freed up credit in the longer run
2. The Howard-Costello changes to capital gains tax and changes to credit availability through reduced interest rates after 2000

It would be nice to blame the political party not of your choice, but in reality, they were only following global trends to a large extent, albeit with an Australian flavour to implementing things.

3. Locally, the ACT (Labor) Government’s difficulties in actually releasing land in 2000-2003/4. This is when they reverted back to having the government develop land rather than selling everything off to private developers. While it sounded good in theory, in practice, land supply was choked for a couple of years (reduced by a third to half from memory). It probably didn’t drive land prices, but it didn’t help either.

4. The ACT bushfires – with 500 homeless families looking for a new home, and Sydney investors suddenly discovering the benefits of investing here, prices went up again. I never did follow that up to see if the effect was anything more than a blip.

5. If you believe the developer lobby here in Canberra, then the increased CUC fee is going to single handedly choke inner city development completely, but I think that might be a bit of exaggeration.

OK, it’s all a bit simplistic, and as a result, there’s holes you could drive a mobile home through. But it sort of covers the basics.

arescarti42 arescarti42 2:12 pm 02 Mar 12

VYBerlinaV8_is_back said :

I don’t think prices will drop much nominally going forward, but in real terms prices will trend a bit lower. After a number of years of this (at least 5, I’m thinking) we will likely see the property market start to rise again.

This is actually reasonably similar to what I think is most likely going to happen. It is also probably the best possible outcome for everyone.

It is pretty much what is happening in New Zealand at the moment, which peaked a little over 4 years ago and after a moderate correction and small recovery, has basically been tracking sideways, with nominal prices down 5% and real prices down 15%.

Of course there are quite a few things that could change that story. A credit event in Europe or a slowdown in China and all bets are off IMO.

EvanJames EvanJames 1:47 pm 02 Mar 12

Can’t copy and paste the text (bloody thing is one giant hyperlink) but he is right about the 2-class Canberra, those that have their own place, and those who might never (I’m one of the latter).

How many ordinary single people on an ordinary income can afford half a million dollars, or even $400k? That EL1 couple might be able to, but if you’re single-income, forget it. As for who is to blame or why the price of housing quadrupled while wages didn’t, I don’t know.

It probably has to come down to supply and demand. Too many people, too few houses. They keep telling us that population growth is great, so-far I can’t see any positives out of it.

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