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Anyone on minimum wage can afford to buy or rent a home in Australia
Topic Started: 29 Jan 2013, 03:53 PM (22,068 Views)
Veritas
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Equality means equality of opportunity, not equal material possessions


Its an old chestnut, Equality of opportunity versus equality of outcome.

Simple truth is that they are inextricable linked. There is no such thing as equality of opportunity without some form of equality of outcome and all the evidence bears that out.
Trojan
29 Jan 2013, 07:07 PM
Veritas
29 Jan 2013, 06:20 PM
Or as I posted earlier in this thread: Do you think its okay for one guy to leave two investment properties vacant because he cant be bothered renting them out while single mothers with two kids sleep in their cars?

I dont.
Define "okay".
I don't like it and I will never do it but its not illegal for him to do so nor can we force him to do otherwise.

Likewise for all the people who through perfectly good food away in developed countries because they don't want to keep leftovers while millions around the world starve.
Or how I use clean drinking water to water my plants and wash my car while others die from lack of clean drinking water.

None of it should exist in an ideal world ... but we don't live in an ideal world.

Alternatively, you said a person should be entitled to their own home and not have to share accommodation.
What do you think about the person who has spare bedrooms (possibly yourself) and have chosen not to rent them out whilst the same single mother sleeps with 2 kids in the car?

This post was just to point out we all have a different definition of "fair" and we all tend to think of richer people who are "unfair" to us much more than we think of the poorer people we are being "unfair" to.
I mean fair or just, yes.

And you raise some interesting questions in what is ultimately a complex debate between the rights of the individual versus the wellnbeing of the collective, the role of Government etc.

For the record, I think there is an injustice at the heart of how we "do housing" in this country. And that there are alternatives. But I fully understand the complexity of the debate.
Quote:
 
Every single economic system that has ever been tried has produced inequality, and probably no more so that the marxist system.

Equality means equality of opportunity, not equal material possessions.

I read your posts, you seem like a bright guy, but no one will carry the can for you. I've hand cut sugar cane at Innisfail, driven trucks, started work at midnight on 14 hour shifts, anything I had to do to get through, but I've not done anything extraordinary. Others have worked far harder and made greater sacrifices.

If I had $600 per week in my hand and had to pay 50% out in repayments, somehow I would make do - take in a boarder, take on a second job, whatever was required.

It's not exceptional, it's normal.


And yet, our close cousins in Europe, have been getting much better results from their housing system using different models that are still entirely in keeping with the broader capitalist model.

Doing things a bit differently does not mean that we have to alter the prevailing economic system.
Quote:
 
Not a single one of them lives in Australia, so this is a complete irrelevancy.


So only Australians can be too blame for not preparing for their retirements?

I presume you say this because you can excuse a poor american in this respect but not a poor Australian?

I appreciate that our safety net is considerable more robust than the American one, but you will forgive me for taking issue with your broad assertions that those who enter into retirment with little in the way of a financial cushion only have themselves to blame.

It really aint that simple.
Edited by Veritas, 29 Jan 2013, 07:38 PM.
Property acquisition as a topic was almost a national obsession. You couldn't even call it speculation as the buyers all presumed the price of property could only go up. That’s why we use the word obsession. Ordinary people were buying properties for their young children who had not even left school assuming they would not be able to afford property of their own when they left college- Klaus Regling on Ireland. Sound familiar?

The evidence of nearly 40 cycles in house prices for 17 OECD economies since 1970 shows that real house prices typically give up about 70 per cent of their rise in the subsequent fall, and that these falls occur slowly.
Morgan Kelly:On the Likely Extent of Falls in Irish House Prices, 2007
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Sunder
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Veritas
29 Jan 2013, 07:31 PM


Its an old chestnut, Equality of opportunity versus equality of outcome.

Simple truth is that they are inextricable linked. There is no such thing as equality of opportunity without some form of equality of outcome and all the evidence bears that out.


Can you explain what you mean by this? I don't see how they are linked at all, let alone inextricably.
Property speculation is a type of gambling... But everyone knows that in gambling, the house always wins in the end.
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miw
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Andrew Judd
29 Jan 2013, 07:00 PM
My daughter demanded to be fed and kept dry and demands juice at night and biscuits icecream and chocolate by day.

And i tell you what, I do not smack her desire down with no. I welcome that she wants, even as i find reasons that more chocolate might not be a good idea today. She has drive and i hope she keeps it.

At some stage we realise that if we want something we are going to have to work for it. I want a Bugatti Veyron, but I do not feel entitled to it.

When I was a child and demanded things I was given jobs to do and the opportunity to earn what I wanted. Admittedly this did not start until I was about 4 years old.

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I often think that if i lost everything i now have that at 57 it would be hard to stay alive at all. From somewhere i would have to get the drive and energy to feel I deserved something better - all over again one more time.


You are not Robinson Crusoe there. But it is one thing to have sympathy for those struck down by the slings and arrows of outrageous fortune and quite another to have sympathy for those who merely made crap life choices and never missed the opportunity to take the easy road.

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It seems normal to feel entitled?

How can it be offensive to want and need and desire?


It is normal to feel desire and want, but entitlement comes not from yearning but from earning.

For everyone who gets something they didn't earn, there is someone who earned something they didn't get.

And before the socialists get their knickers in a knot, there are examples of people feeling entitled and taking all the way from the dole bludger on the Gold Coast right up to the CEO who takes a fat bonus even when shareholder value was not delivered. I find the sense of entitlement offensive at all levels.
The truth will set you free. But first, it will piss you off.
--Gloria Steinem
AREPS™
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GloomBoomDoom
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Shadow
29 Jan 2013, 06:33 PM
If low-income middle-aged people are unwilling to share, then they can BUY their own home for around $200 per week.
Is that $200 before or after the RBA raises interest rates back to 7%?

I failed to see the $200 example broken down but it does sound unlikely. I'm going to assume that this is an interest only payment for a 1br dump in bumfuck with a huge deposit as well?

Edit : I clicked the link. Studio Apartment? Would the bank even lend money for a place like that? Don't people only stay in studio apartments to blow their brains out or operate a temporary meth lab? :)
Edited by GloomBoomDoom, 29 Jan 2013, 08:09 PM.
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Veritas
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Sunder
29 Jan 2013, 07:41 PM
Veritas
29 Jan 2013, 07:31 PM


Its an old chestnut, Equality of opportunity versus equality of outcome.

Simple truth is that they are inextricable linked. There is no such thing as equality of opportunity without some form of equality of outcome and all the evidence bears that out.


Can you explain what you mean by this? I don't see how they are linked at all, let alone inextricably.
The scope of your "opportunities" is very much dependant on what you are born into.

Property acquisition as a topic was almost a national obsession. You couldn't even call it speculation as the buyers all presumed the price of property could only go up. That’s why we use the word obsession. Ordinary people were buying properties for their young children who had not even left school assuming they would not be able to afford property of their own when they left college- Klaus Regling on Ireland. Sound familiar?

The evidence of nearly 40 cycles in house prices for 17 OECD economies since 1970 shows that real house prices typically give up about 70 per cent of their rise in the subsequent fall, and that these falls occur slowly.
Morgan Kelly:On the Likely Extent of Falls in Irish House Prices, 2007
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miw
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Veritas
29 Jan 2013, 07:31 PM
And yet, our close cousins in Europe, have been getting much better results from their housing system using different models that are still entirely in keeping with the broader capitalist model.
This is a very shaky assertion at best. They get different results is the best you can say. Your average European lives in shit accommodation compared to the average Australian, but they are possibly more satisfied with it because everyone else lives in relatively shit accommodation too.
The truth will set you free. But first, it will piss you off.
--Gloria Steinem
AREPS™
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Andrew Judd
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Veritas
29 Jan 2013, 07:31 PM


Its an old chestnut, Equality of opportunity versus equality of outcome.

Simple truth is that they are inextricable linked. There is no such thing as equality of opportunity without some form of equality of outcome and all the evidence bears that out.
That seems obviously false.

It might work for two children and two potatoes or two icecreams but how does it work when goods and services are limited?

It seems true that everybody can get basic accommodation and then everything else is relative to that.
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miw
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Veritas
29 Jan 2013, 07:31 PM
So only Australians can be too blame for not preparing for their retirements?

I presume you say this because you can excuse a poor american in this respect but not a poor Australian?
Nope. You were bitching about the cost of accommodation in Australia and when you get called on it you introduce the total irrelevancy of food stamps in America.

Quote:
 
I appreciate that our safety net is considerable more robust than the American one, but you will forgive me for taking issue with your broad assertions that those who enter into retirment with little in the way of a financial cushion only have themselves to blame.


Oh I am sure they blame all kinds of people.
The truth will set you free. But first, it will piss you off.
--Gloria Steinem
AREPS™
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Miles McCarthy
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Shadow
29 Jan 2013, 03:53 PM
Some of the other bulls and bears may like to perform a similar exercise for other cities, but since Perth is supposedly one of the 'least affordable' cities in Australia, I think this example should be quite enlightening. The bottom line is that it is quite easily affordable for anyone on minimum wage to buy or rent accommodation in Australia.


The national minimum wage is $606 per week

You can rent in Perth for $140 per week

Or you can buy in Perth for $207 per week

(Buyer eligible for $7K FHOG. No stamp duty payable on WA FHB purchases under $500K. Assumed 20% deposit and Westpac 3-year fixed rate of 5.39%)

Now I'll wait for the excuses... 'but but but they would have to share, they would have to save a deposit, they would have to make sacrifices, that's not a desirable suburb, everyone is entitled to a freestanding 9-bedroom mansion in Peppermint Grove as their first home, oh the humanity!'
I started to do a similar exercise for Sydney, but decided I would check your assumptions for Perth first.

Cheapest on your list was $205,000, which with 20% deposit of $41,000 and $7000 FHOG would result in a loan of $157,000, which @ 5.39%, the only way to get your mythical $207 per week repayment was to use a 30 year term. Well, I've learned something new today. Australian banks will loan on a 30 year term to someone earning minimum wage. Well, why not.

Then there is a matter of the deposit. $606 per week gross is $557 per week net.

Less $140 per week rent in shared accomodation = $417
Less $20 per week utilities = $397
Less $105 per week food = $292
Less $30 per week train or bus ticket = $262

Well assume that your hero doesn't drink alchohol, own a car or a phone, have a girl/boy friend, eat out or go out at all, has no unexpected outgoings,buys no gifts, and saves $262 per week, and that all expenses and minimum wage are tied to inflation, so rising wages cancel out rising costs.

Saving $262 per week, it would only take 156 weeks to save the deposit, which is a mere 3 years (and change) without drinking or socialising with your fellow humans in any way. Bears would find the first of those easy and the second difficult, bulls would be the other way around.

Of course, the price of houses will start rising again, so the goalposts get a little further away each year. Let's assume the great Australian mythology of 'double in ten years' which is 7% per year. So in 3 years the $205,000 unit is now priced at $251,000. Which means the deposit is now $50,200, which is 3 years 9 months to save the deposit, and the loan repayments are now $250 per week, but still within the realms of possibility.

As for Sydney, I found similarly priced share accommodation at $140pw, cheapest 1 bedroom I could find that wasn't a retirement home (assisted living) or a student dorm room (i.e. it had a kitchen), was $189,000 , although there were a lot of studio apartments for 90-160K as well.

Personally, I would pass on Cabramatta, but the opportunity is there for teetotaling hermits to save for 4 years and get their foot on the property ladder.


The whole aim of practical politics is to keep the populace alarmed (and hence clamorous to be led to safety) by menacing it with an endless series of hobgoblins, all of them imaginary.
H. L. Mencken

.
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Andrew Judd
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Miles McCarthy
29 Jan 2013, 08:23 PM
I started to do a similar exercise for Sydney, but decided I would check your assumptions for Perth first.

Cheapest on your list was $205,000, which with 20% deposit of $41,000 and $7000 FHOG would result in a loan of $157,000, which @ 5.39%, the only way to get your mythical $207 per week repayment was to use a 30 year term. Well, I've learned something new today. Australian banks will loan on a 30 year term to someone earning minimum wage. Well, why not.

Then there is a matter of the deposit. $606 per week gross is $557 per week net.

Less $140 per week rent in shared accomodation = $417
Less $20 per week utilities = $397
Less $105 per week food = $292
Less $30 per week train or bus ticket = $262

Well assume that your hero doesn't drink alchohol, own a car or a phone, have a girl/boy friend, eat out or go out at all, has no unexpected outgoings,buys no gifts, and saves $262 per week, and that all expenses and minimum wage are tied to inflation, so rising wages cancel out rising costs.

Saving $262 per week, it would only take 156 weeks to save the deposit, which is a mere 3 years (and change) without drinking or socialising with your fellow humans in any way. Bears would find the first of those easy and the second difficult, bulls would be the other way around.

Of course, the price of houses will start rising again, so the goalposts get a little further away each year. Let's assume the great Australian mythology of 'double in ten years' which is 7% per year. So in 3 years the $205,000 unit is now priced at $251,000. Which means the deposit is now $50,200, which is 3 years 9 months to save the deposit, and the loan repayments are now $250 per week, but still within the realms of possibility.

As for Sydney, I found similarly priced share accommodation at $140pw, cheapest 1 bedroom I could find that wasn't a retirement home (assisted living) or a student dorm room (i.e. it had a kitchen), was $189,000 , although there were a lot of studio apartments for 90-160K as well.

Personally, I would pass on Cabramatta, but the opportunity is there for teetotaling hermits to save for 4 years and get their foot on the property ladder.
You do not appear to need a 20% deposit in Australia unless conditions have really tightened in the last two months.

Peter can probably get you a 95% mortgage?

Edit: Seems so but you would pay about 6000 lenders mortgage insurance added to the money borrowed
Edited by Andrew Judd, 29 Jan 2013, 08:31 PM.
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