The dirty little secret that keeps Australian housing wildly unaffordable
The dirty little secret that keeps Australian housing wildly unaffordable
Home owners may express sympathy for renters priced out of the market, but the truth is that they like owning expensive real estate – and don’t want it to get cheaper.
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I read the article, but missed the secret. What's the secret?
Yeah, clickbaity title I know. But if you're not being sarcastic:
- Decades of government policy that has favoured property as an investment vehicle
- Little effort to change it as too many voters have financially benefited from it
- Any change that would fix the problem in any significant way would likely result in an economic downturn
I guess it's a "secret" in the sense that government doesn't talk about it so plainly, but not really a secret to anyone else.
Kohler's Quarterly essay should expand on the article significantly, but it's paywalled and quite expensive (and not released yet).
I would have linked the Australian politics podcast episode which goes into more detail too, particularly in terms of the historical causes, but I'm not sure of the policy on linking podcasts here.
Yeah it pretty much just lists known facts, then ends with 'someone outta do something!!' Waste of pixels.
I didn't read the article yet and this is basically what I expected. Hardly a secret, and a fairly good summary. The economy is going to downturn anyway because people just can't afford the new housing. For a two bedroom anywhere with people, it's 650,000 and up. At that point you have to be married to someone who also works full time to have any reasonable chance of being able to afford the mortgage. At the average interest rate of 6% you're paying $4,100 per month, which is about the average pre-tax income (~$54,000 per year, so ~$1038 per week). Of course, that leaves very little wiggle room to save, and if either of you were to lose your jobs or the interest rate goes up, you'd probably default.
EDIT: I forgot to add the point. It's this. A whole bunch of people are going to default. People take bad mortgages because they have to, it's not like its an option to be homeless and sharing a house with strangers can really, really suck. But those people are going to be defaulting, or moving overseas, or just staying at home with their parents. The market will correct itself.
People say the market corrects itself all the time and I don't know what to make of it. I too was born of the lie of meritocracy and wild NeoLiberal economic claims and yet all I've ever seen, save for 2 moments in my life, is the market consolidating wealth to the top.
That definition of market correction insinuates the market only works for the rich, so, I mean, if you aren't rich maybe reconsider spreading their propaganda for free. Get paid for your services at the least, they can afford it.
Or, like the article describes, maybe youre one of the chosen ones to own a home, and your "retirement" or future financial security is tied to it, so you've become strong armed, blackmailed, into reinforcing this fucked up status quo.
Regardless, to fix the housing crisis everybody has got to accept that their homes are overinflated in value and need to come back to reality. Everybody has to give something, there is no social change thats not going to require change from everyone. Like...the dialectics make that clear in their own. Government might have to mandate banks renegotiating terms for some housing loans, but so what. Banks are part of the society too, they should also expect to change as well.
The alternative means you choose a heartless meatgrinder of a society. And really, with global inflation, China potentially crashing, the USA potentially crashing, the UK potentially crashing, and BRICS potentially undermining/destroying the value of the dollar well, news flash, no ones retiring.
I don't know how anyone could have that kind of faith in capitalism. A once in a lifetime financial event almost every 5 years now.
Think of how many years it'd take to salary out to 650k, vs finding free shit online and literally sourcing and making every component, from scratch.
I can source together the materials and build a house faster than I could pay for one already built, in this market. Decades sooner.
The secret is there are too many beneficiaries to expensive houses to really move governments into fixing the problem properly. There are a Million Millionaires thanks to housing prices and they'll be really cross if you go and make them as poor as the others.
It's not really a secret, though. It just isn't something spoken about in Parliament because it's a huge hit button issue.