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Renting now the norm for a generation of Australian families; Buying a home now impossible for many, even the middle classes
Topic Started: 21 Aug 2014, 12:27 AM (2,730 Views)
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Renting now the norm for a generation of families: report

August 19, 2014
Clay Lucas

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Booming house prices have dramatically changed the profile of the average renter in Victoria, with new analysis to be released on Wednesday showing families now rent 42 per cent of the state's privately leased homes.

Experts say the change is the consequence of the massive spike in home prices since 1997, and argue Victoria needs to dramatically change its laws around renting to give more power to tenants and make it harder for landlords to evict long-term renters.

More than one million people now live in private rental housing in Victoria.

The report, from the Tenants Union, finds the persistent perception of tenants as a lone person or a student living in share housing as "increasingly misguided".

Instead, the research shows renting for a decade or more has become the norm for a generation of families and middle-aged people.

It is in stark contrast to 1981, when single people living by themselves made up almost half of Victoria's renters. Families at that time represented only a quarter of all rentals.

Jump forward three decades to 2011, when the last reliable statistics are available, and 42 per cent of household tenants were either couples with children or single-parent families. (On a slightly different reading of the figures, this drops to 36.4 per cent.)

And despite the huge taxpayer subsidies to landlords via negative gearing, Australian renters experience some of the lightest-touch regulations in the western world.

Laws in other western countries offered more secure rental tenure, with longer lease terms, narrower reasons for eviction, and longer notice periods before a landlord could demand a tenant move, a Grattan Institute report found last year.

Tenants in other countries also have more rights to keep a pet or make minor alterations such as small holes in the wall without the landlord's permission, it found.

In Australia, a typical lease lasts from six to 12 months compared to two to three years in France and Hong Kong. Germany and the Netherlands offer indefinite lease terms, the report said.

Swinburne University housing expert Kath Hulse said it was unfortunate Australians still associated renting with young singles and couples about to buy a home. "It's just not true."

The common view was to look down on renting, she said. "You don't find too many people at a party saying proudly 'I'm a tenant.' People say the opposite – "I'm just a tenant" – as though they were a second-class citizen."

"It is a feature of the countries where the great dream of home ownership – America, Canada, Australia. People buy into that and they want it."

Professor Hulse said buying a home was now impossible for many, even the middle classes, "unless it is a long way from the city".

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Read more: http://www.theage.com.au/victoria/renting-now-the-norm-for-a-generation-of-families-report-20140819-105xeb.html
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van
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Government needs to get involved in building lots of public housing. Lots of people just receive a welfare cheque but it does not come close to covering the cost of rent.

The government has to be responsible now because they are letting in too many immigrants when there is not enough housing for people.
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silverman47
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van
21 Aug 2014, 12:38 AM
Government needs to get involved in building lots of public housing. Lots of people just receive a welfare cheque but it does not come close to covering the cost of rent.

The government has to be responsible now because they are letting in too many immigrants when there is not enough housing for people.
Its been done, public housing gets trashed.

Welfare is designed to be a hand up, not a hand out for the rest of your life. Anybody i know that has grown up in public housing to this day is extremely poor, also living in public housing. It creates a culture of welfare bludgers, and should only be used for a short time span.

We've got far too many hand outs in this country as it is. I'd suggest go visiting www.lazyarsedolebludgerforum.com.
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goldbug
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The government is always slow to act, it's in their nature. Eventually though they will and I'm sure it won't be in favor of the LL's. A landlord and his wife owning 3 properties is still just 2 votes. The 3 properties could contain 6 or more votes.
Shadow was hopelessly wrong about the Gold Bull Market.
What else is he wrong about?
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Black Panther
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Ready to admit I was right again.

Its the transmutation.

As I predicted previously, the Government will be dragged screaming and kicking into re instituting the massive public housing schemes of the 1960's, but the political pressure for this to happen wont manifest until 2025, or there about.

By the time their policies produce any practical outcomes it will be 2030.

How old will you be when your public apartment is ready ? That is the question you should be asking.
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van
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Public housing does not get trashed. I do know there are problems with Aboriginals trashing public houses but not everyone does it.

I think housing is going to become more unaffordable as the liberal government said they want to create an extra 2% of GDP per year on existing GDP forecasts, probably try to increase immigration to obtain it.
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Jock
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silverman47
21 Aug 2014, 06:25 AM
Its been done, public housing gets trashed.

Welfare is designed to be a hand up, not a hand out for the rest of your life. Anybody i know that has grown up in public housing to this day is extremely poor, also living in public housing. It creates a culture of welfare bludgers, and should only be used for a short time span.

We've got far too many hand outs in this country as it is. I'd suggest go visiting www.lazyarsedolebludgerforum.com.
Perhaps then it is time for the property VI's that run Australia to stop industrial scale immigration and offshoring of jobs? Constantly undermining workers and pushing people onto the dole (and then demonising them) with the added twist of deliberately creating housing stress for a growing minority and most certainly all those too young to buy in the 'good old days' . Then perhaps we will not need social housing but on todays deliberate course it will be the only option or perhaps people will be allowed to live under bits of tin on side of the road just like in 3rd world countries (is this what 'THEY' really want?. I think they do)
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stinkbug
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van
21 Aug 2014, 07:44 AM
Public housing does not get trashed. I do know there are problems with Aboriginals trashing public houses but not everyone does it.

I was in pub;ic housing for a while as a kid. Plenty of people trashed their brand new homes, and they weren't aboriginal.
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While it's true that those who win never quit, and those who quit never win, those who never win and never quit are idiots.

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Black Panther
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Jock
21 Aug 2014, 07:49 AM
Perhaps then it is time for the property VI's that run Australia to stop industrial scale immigration and offshoring of jobs? Constantly undermining workers and pushing people onto the dole (and then demonising them) with the added twist of deliberately creating housing stress for a growing minority and most certainly all those too young to buy in the 'good old days' . Then perhaps we will not need social housing but on todays deliberate course it will be the only option or perhaps people will be allowed to live under bits of tin on side of the road just like in 3rd world countries (is this what 'THEY' really want?. I think they do)
Bingo, thats the stark choice of the future.
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Bold approach solves the rent or buy conundrum

August 20, 2014
Melissa Browne

The great Australian dream is to own your own home. There are countless books and articles written about how to achieve it and even a movie about saving it. It’s the largest purchase many of us will make in our lifetime and owning it is a rite of passage: proof you have finallygrown up and are putting down roots.

However a growing number of people are questioning whether we should bother. With the price of homes rising and median home prices in some suburbs well out of reach of many potential homebuyers it is certainly a dream worth reconsidering. The problem with the alternative however is you’re simply paying down someone else’s mortgage and not accumulating any assets of your own. That is unless you consider a third option which is renting where you live and buying property as an investment only.

It’s an interesting alternative and one worth considering if you are able to remove the emotion around owning your own home. So what are the pros and cons of renting where you live and purchasing properties to invest instead?

The obvious down side of this strategy includes not owning your own home which is something many people are emotionally connected to. However if you can put that aside, there are a few more cons to this strategy:

Instability: Being a perpetual tenant means you are at the whim of your landlord who may decide to sell the property, renovate it or move into it themselves. This might be a deal breaker if stability is important to you, especially if you have a family and don’t want to move around.
Any Improvements are lost. Many people like to put their own stamp on a place however if you’re renting any material changes invariably needs landlord improvement and often can’t be taken with you when you go. So money spent on a home you’re renting is often a wasteful exercise.
Capital Gains Tax Unlike owning your own home which is a capital gains tax exempt asset, when you sell an investment property you will almost always have to pay capital gains tax.

Of course with any downside there is usually an upside. With this strategy the pros include:

Rental deductions If you run a business or aren’t provided somewhere to work by your employer you may be able to claim a percentage of the rent you paid during the year. If you claimed a percentage of your ownership expenses and you owned your own home there would be capital gains consequences however with a rental, there’s no such problem.
Costs are deductible Many of the costs associated with owning and renting out an investment property are deductible including interest. This means the cost of owning the property is reduced by the tax deduction you receive. With most people purchasing their own home today having a fairly high mortgage this means the true cost of ownership is often hundreds of thousands of dollars more than the purchase price which is often not factored in when they’re working out the profit they’ve made.
Asset is income producing: Your investment property is income producing which in many circumstances means there is not a significant shortfall each week. This may mean instead of only being able to afford one asset, which is often your home, you can afford multiple investments as they are not reliant on you to pay the bills. This may mean you can leverage growth and diversify your risk in different suburbs or with different types of properties

Read more: http://www.smh.com.au/money/borrowing/bold-approach-solves-the-rent-or-buy-conundrum-20140814-1042kf.html
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