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Zed weeps for the first home buyers

By johnboy - 29 March 2012 74

Liberal Leader Zed Seselja is expressing his sadness that there are no Canberra suburbs with a media house price under $300,000 which makes the ACT uniquely unaffordable.

Zed remains silent as to whether lower real estate values are Liberal policy (which would be a balls-out move). But he does have this to say:

“The Canberra Liberals believe the solutions to the ACT’s housing affordability problems should include a genuine land bank, which would have a pool of land ready to release, infrastructure improvements, taxation reform, streamlining the planning system and improving competition in the market.

“Through our Infrastructure Canberra policy, the Canberra Liberals would also establish an independent infrastructure commissioner backed by an industry board to ensure that infrastructure which supports housing is delivered in a more timely and targeted manner.

Should we, however, be too concerned about first home buyers who have, by definition, tens of thousands in savings, versus those at the bottom end of the rental market?

Also bear in mind the Government will try and claim housing in Canberra is affordable compared to average wages in the ACT, ignoring the roughly half of the distribution curve earning below average wages.

What’s Your opinion?


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74 Responses to
Zed weeps for the first home buyers
devils_advocate 2:23 pm 29 Mar 12

arescarti42 said :

Alderney said :

As the owner of more than 1 home, I don’t want housing to be more affordable.

If I can’t make a profit on my investments there’ll be hell to pay for the pollie who strips my assests.

IIRC, about 2/3rds of households “own” their home, many of which bought with tiny deposits and would be totally up s*** creek with negative equity if prices were to fall to affordable levels, which is why any political party promising to make housing more affordable by deliberately reducing prices is totally full of s***.

Why are people up s–t creek with negative equity if prices fall? In the absence of anything else, they continue to make the repayments and the only real problem they face is the nagging feeling that they could have bought for less. It’s not like the bank is randomly going to come around and do a revaluation on the house and ask for more money. It would be against their own interests to do so. The real issue would be negative equity COMBINED with a job loss. But in the present economy job losses seem unlikely, efficiency dividends notwithstanding.

RE: the stamp duty issue, the original post seems to be suggesting that supply side constraints are driving the price up. If that’s true, then it’s too much money chasing too few houses. Eliminating stamp duty won’t do anything, because the ability to pay of the demand side (and therefore the price) will just increase by the same amount as the stamp duty saving. So, abolishing stamp duty won’t do much at all.

chewy14 2:21 pm 29 Mar 12

Alderney said :

As the owner of more than 1 home, I don’t want housing to be more affordable.

If I can’t make a profit on my investments there’ll be hell to pay for the pollie who strips my assests.

Shouldn’t Zed be spouting some mantra about letting the market be or something? Anyone would think he has developed a social policy conscience.

For Zed’s sake, I hope Tony Abbott doesn’t find out there might be social policy advocates in the Liberal Party.

If the government “Let the market be” in the ACT, there would be significant falls in property prices. The only reason they are so high is due to large amounts of government interference from start to finish.

VYBerlinaV8_is_back 2:18 pm 29 Mar 12

arescarti42 said :

Alderney said :

As the owner of more than 1 home, I don’t want housing to be more affordable.

If I can’t make a profit on my investments there’ll be hell to pay for the pollie who strips my assests.

IIRC, about 2/3rds of households “own” their home, many of which bought with tiny deposits and would be totally up s*** creek with negative equity if prices were to fall to affordable levels, which is why any political party promising to make housing more affordable by deliberately reducing prices is totally full of s***.

I think you’ll find about a third of people live in homes owned outright, a third are living in a home being paid off and a third rent.

Of the third of people paying off a home, I’d expect there to be a range of situation, from almost paid off through to just making first payment.

arescarti42 2:07 pm 29 Mar 12

Alderney said :

As the owner of more than 1 home, I don’t want housing to be more affordable.

If I can’t make a profit on my investments there’ll be hell to pay for the pollie who strips my assests.

IIRC, about 2/3rds of households “own” their home, many of which bought with tiny deposits and would be totally up s*** creek with negative equity if prices were to fall to affordable levels, which is why any political party promising to make housing more affordable by deliberately reducing prices is totally full of s***.

HenryBG 2:05 pm 29 Mar 12

dpm said :

It’s interesting as people already whinge and claim it as a ‘slum’ if a new block of flats (remember the famed development at Jammo, built by the same wizards that brought us Space?) gets built in an established suburb. Can you imagine what people would then say if they built an entire suburb with a $300k median house price?

Besides, considering the majority of 1 bed units on Allhomes are $300+, what will these cheaper places look like??

The answer is to stop putting illegal immigrants on the dole and in free houses, and instead to give them jobs in the construction industry, just as we did with migrants prior to the 1970s. And release some swathes of land at reasonable prices.

dpm 1:38 pm 29 Mar 12

It’s interesting as people already whinge and claim it as a ‘slum’ if a new block of flats (remember the famed development at Jammo, built by the same wizards that brought us Space?) gets built in an established suburb. Can you imagine what people would then say if they built an entire suburb with a $300k median house price?

Besides, considering the majority of 1 bed units on Allhomes are $300+, what will these cheaper places look like??

Alderney 1:37 pm 29 Mar 12

As the owner of more than 1 home, I don’t want housing to be more affordable.

If I can’t make a profit on my investments there’ll be hell to pay for the pollie who strips my assests.

Shouldn’t Zed be spouting some mantra about letting the market be or something? Anyone would think he has developed a social policy conscience.

For Zed’s sake, I hope Tony Abbott doesn’t find out there might be social policy advocates in the Liberal Party.

c_c 1:33 pm 29 Mar 12

Improving competition in the market, will Zed abolish the LDA stranglehold?

Also curious is Zed again making reference to improved infrastructure. How does improved infrastructure make homes cheaper, if anything one would think it bumps up the costs to developers and government which are then passed on in rates and land costs? Then again this is the same infrastructure policy that he promises to be see all and be all.

Keijidosha 1:16 pm 29 Mar 12

It amuses me that Zed is so concerned with this issue that his response is to rinse and repeat the same media release:

http://the-riotact.com/zed-vows-to-make-housing-more-affordable/55129
http://the-riotact.com/average-first-home-hits-400000-half-of-it-in-tax/56560

arescarti42 1:16 pm 29 Mar 12

This is incredible, it seems like every couple of months when Zed has nothing better to bitch about, he puts out some generic release lambasting the government on housing affordability. The last two paragraphs from today’s release are almost a direct copy and paste from a similar media release of his from September last year.

As I’ve pointed out the last two times he’s done this, the only way a land bank, infrastructure improvements etc. etc. are going to improve affordability is if they increase supply enough to cause prices to fall, and that is politically unthinkable.

Housing affordability is a real problem in Canberra, but this moron continues to use it as an excuse to bash the current government whilst providing no credible solutions of his own.

mezza76 11:52 am 29 Mar 12

Problem is no ACT Govt will give up Stamp Duty or even like to reduce it (for low income earners or anyone else for that matter). Like it or not Stamp or transfer duties are the main source of income for a small Territory like the ACT (no royalties here). Of more concern is the lack of incentive for the ACT Government to do anything other than raise Stamp Duty. As there is no freehold land in the ACT the Stamp Duty refers to leases which is tax deductable for investment properties. Basicially if you rent your dwelling you in effect get a Stamp Duty concession. So the ACT Government is pretty much cost shifting to the Commonwealth by having high amounts of Stamp Duty to which ACT residents can rent their home for a year and negative gear, claiming back the Stamp Duty. I was advsied that when buying a house in the ACT it would be best to rent it for a year rather than live in it. So there isn’t much incentive there for the ACT to lower Stamp Duty and if you rent your property there isnt much care. The only people that do are probably familes who want to move into the place straight away.

Chop71 11:43 am 29 Mar 12

Stamp Duty is the killer, yet I don’t see any government giving up this over priced cash cow.

Mysteryman 11:39 am 29 Mar 12

I would consider most of my friends to be fiscally responsible (good at budgeting and saving, not prone to unnecessary expenditure), but the only first home buyers amongst them that have been able to buy a home in the past 4 years are on individual or combined salaries of $150,000 a year, or more. I would estimate those salaries to be well above the national average. They didn’t get fancy homes in leafy, inner city suburbs, either. They got 30-40 year old ex-govy homes in outer areas.

Of course, the usual people will come in here and claim that home ownership is affordable for everyone, without divulging the facts that they bought more than a decade ago, when prices were much less than now (even in comparison to average wages at the time), but it seems to me that Canberra is not very affordable when it comes to home ownership.

Eirlys 11:25 am 29 Mar 12

I always find the idea that Canberra renting is affordable odd, especially as I pay half my income in rent, and I am on the cheaper side of rent in the suburb I live in. I don’t have a public service salary, perhaps that means I don’t count in their statistics?

I have had a bit of a look around, and for the houses just like the one I am renting ALL the prices are more expensive for rent. From my experience renting a house in the ACT on only my oncome is only just affordable. So the affordability to me isn’t true.

Oh and don’t tell me to buy, I am fortunate to have, very recently, saved some money, but even with my savings my income (alone) will not allow me to purchase an appropriate house. So I do not find the ACT a highly affordable for renting or buying.

Bluey 11:22 am 29 Mar 12

As a first homebuyer Ive just had my savings completely stripped by paying a deposit and then stamp duty. I’m broke again and I havent even moved in yet.

So yes whilst we have to scrimp and save 10s of thousands to get into the market. Having lower prices would be great. A FHB stamp duty exemption like NSW would go a LONG way to reducing pressure though. 3% of value is almost a home deposit in itself. I could have put 10% down instead of 5% and avoided paying more in mortgage insurance.

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