Housing costs have not risen in Australia since 1995. The Australian Bureau of Statistics says the percentage of gross household income spent on housing, both for those with mortgages and those renting, is the same today as it was 28 years ago. We’re still spending about one-fifth of household gross income on accommodation costs.
That’s an extraordinary revelation for anyone who absorbs and believes newspaper headlines. It’s reasonable to ask: Why are we being told we have an affordability crisis? Why is the media telling us we have the world’s most unaffordable housing?
The short answer is that, in the context of the nation’s metropolitan newspapers, journalism is on life support. Newspapers are no longer reliable sources of information. They are, too often, vehicles to push the political and commercial views of their owners.
The Murdoch newspapers have been running a political campaign against the current federal government that should be an embarrassment to everyone who works for the organisation and considers themself a journalist.
It doesn’t matter whether you want the government to lose this weekend’s election or not. What matters is that these publications are filled with propaganda when they have an ethical obligation to present balanced news and verified information.
This kind of distorted presentation of “news” extends beyond politics. There are few sectors where the content of newspapers is more misleading than in the coverage of real estate.
Again, Murdoch papers are the most culpable. For several years I wrote real estate columns twice a year for The Australian. Eventually I quit. Often my views were censored by the newspaper because they were deemed to be contrary to its commercial interests and political policies.
Companies who had commercial arrangements with the newspaper could not be shown in an unfavourable light. Politicians from certain political parties could not be criticised. Firms ripping off consumers could not be exposed if they were advertisers.
The editorial staffs employed by these publications operate under similar restrictions. By definition, they are no longer journalists.
For these and other reasons, I advise consumers at seminars, webinars and home shows that the first rule of effective real estate research is to stop reading newspapers. The real estate content of metropolitan papers is mostly a regurgitation of press releases from individuals and organisations pushing views in which they have a vested interest.
Every time I speak at an event, most questions from the floor are based on misinformation. I’m alarmed at how many people have their heads full of negative, sensationalist nonsense. Often their beliefs are quite opposite to the facts, as revealed by genuine research.
The level of misinformation has reached alarming proportions. It’s a serious issue because it prevents people from making quality investment decisions – decisions that put hundreds of thousands of dollars at risk.
The unrelenting stream of media talk about the so-called affordability crisis, the claim that we have the most expensive dwellings on the planet and hysteria about an impending collapse in property values is a prime example.
We’re told regularly that prices have risen unreasonably and that housing is beyond the reach of first-home buyers.
The ABS data shows how wrong that notion is. So, too, does the latest affordability index from the Commonwealth Bank and the Housing Industry Association.
The index shows we have had ten consecutive quarters of improving affordability. Over the past 2-3 years, until the recent recovery, we have had falling prices in our major cities. This coupled with steadily rising incomes and sharply falling interest rates, means that affordability is the best it’s been any time in the past five years.
The reporting of these facts in newspapers has been muted, to say the least. It sits in stark contrast to the coverage given to an overseas spruiker who seeks to create publicity for a seminar tour or a book launch by claiming our property values will fall 50, 70 or even 90% (an issue I tried to discuss in my column in The Australian but was, once again, censored).
To be informed, and to avoid being misinformed, on real estate or on any topic, consumers must stop reading newspapers and start using the many good sources available via the internet.
28 years ago, there were fewer dual/triple income households. The housing economy is affordable if you have the average sized family or bigger. (With average income or bigger)
New buildings are generally sized for the average family unit, you can go to a builder and request a 1 or 2 bedroom house, but they don't generally stock plans for those sizes. I assume the people who cry about it being unaffordable are the ones who believe you can't get a specific build out of a builder or are looking at 4 - 5 bedrooms for their new 2.5 family.
Plots of land are similar, they are released in average sized allotments that may well be too big for smaller homes.
I can't afford an average house, that's down to my own mismanagement of life so far. I have been thinking about building a much smaller home than most people, my life circumstances allow for that and it is definitely feasible.
Not sure how a bank will look at it though.
Saving for a bigger deposit or an outright purchase is on my books for the future.
Saying all this, I'm sure I'm not the only one who wouldn't mind cheaper land, but that's a pipe dream, expecting the state governments to reduce their income.
"If man is to survive, he will have learned to take a delight in the essential differences between men and between cultures. He will learn that differences in ideas and attitudes are a delight, part of life's exciting variety, not something to fear." - Gene Roddenberry
"Balloon animals are a great way to teach children that the things they love dearly, may spontaneously explode" -- Lee Camp
28 years ago, there were fewer dual/triple income households. The housing economy is affordable if you have the average sized family or bigger. (With average income or bigger)
New buildings are generally sized for the average family unit, you can go to a builder and request a 1 or 2 bedroom house, but they don't generally stock plans for those sizes. I assume the people who cry about it being unaffordable are the ones who believe you can't get a specific build out of a builder or are looking at 4 - 5 bedrooms for their new 2.5 family.
Plots of land are similar, they are released in average sized allotments that may well be too big for smaller homes.
I can't afford an average house, that's down to my own mismanagement of life so far. I have been thinking about building a much smaller home than most people, my life circumstances allow for that and it is definitely feasible.
Not sure how a bank will look at it though.
Saving for a bigger deposit or an outright purchase is on my books for the future.
Saying all this, I'm sure I'm not the only one who wouldn't mind cheaper land, but that's a pipe dream, expecting the state governments to reduce their income.
Part of the problem is that the marginal cost of making a new house bigger (once you have earthmoving equipment, trades, deliveries etc on-site and as approvals and provision of services are pretty much fixed for any size house) is low. I recall someone building a modest McMansion a few years back using a project home spec and the cost of adding a large family/rumpus/media room was going to be an extra $5,000-$8,000 to the costs.
To build a house that is, say, 33% of the size of an average build is going to be (I'm guessing) 66%+ of the cost of the average build.
“You Keep Using That Word, I Do Not Think It Means What You Think It Means” - Inigo Montoya
To build a house that is, say, 33% of the size of an average build is going to be (I'm guessing) 66%+ of the cost of the average build.
good call barns. This is why seemingly everybody builds to the boundaries with the alfresco being the new replacement for a traditional backyard. (for some people saving the 33% might be worth the sacrifice though)
locating cheaper land (somehow) could go a long way to solving the puzzle for Kulganis IMHO
Being poor is not all shitz n gigglez not even in Australia, that's why they should bother.
Centrelink benefits won't feed a family, won't help with vet bills, or medical bills (unless you're on DSP or Pension). Frell, it barely pays the rent.
This is for Newstart, for job seekers, in a job market where employers are poaching employees, long term unemployed will stay just that.
Austudy is worse.
Blown if I can get a temporary job, while I study. Every employer, even coles and woolworths is looking for long term employees and casual's seem to be picked more from migrants than citizens. (I assume that's because the employer thinks they can get away with breaking the law more with people who weren't born into this system)
I'm doing an IT course, mostly because I want to know more about what I already do. But it appears that shelf stackers cost bucket loads to train, so employers don't want people who are likely only to be around for 6 months.
I really should have stayed with my last employer, regardless of how they treated their staff, it would have been far less hassle.
But, I live alone, with my cat, my partner comes over here or there. Finding rentals that allow pets is a nightmare, I think I'm going to have to build soon(ish).
I don't need a big house, frell, I've lived in a converted laundry before (complete with taps that work, above my bed), literally smaller than a prison cell.
"If man is to survive, he will have learned to take a delight in the essential differences between men and between cultures. He will learn that differences in ideas and attitudes are a delight, part of life's exciting variety, not something to fear." - Gene Roddenberry
"Balloon animals are a great way to teach children that the things they love dearly, may spontaneously explode" -- Lee Camp
"The poor are there just to scare the shit out of the middle class. Keep 'em showing up at those jobs" George Carlin
The Oz 'poor' actually make the Oz middle class wonder why they bother continuing to show up at those jobs these days perhaps Kulganis?
Veritas - YA BACK! (Skamy will be MOST displeased ... )
au contraire this place is boring without young Veritas, I am delighted that he is back. Although I suspect he was hoping I might have popped my cloggs and disappeared while he was away.
Definition of a doom and gloomer from 1993 The last camp is made up of the doom-and-gloomers. Their slogan is "it's the end of the world as we know it". Right now they are convinced that debt is the evil responsible for all our economic woes and must be eliminated at all cost. Many doom-and-gloomers believe that unprecedented debt levels mean that we are on the precipice of a worse crisis than the Great Depression. The doom-and-gloomers hang on the latest series of negative economic data.
"If man is to survive, he will have learned to take a delight in the essential differences between men and between cultures. He will learn that differences in ideas and attitudes are a delight, part of life's exciting variety, not something to fear." - Gene Roddenberry
"Balloon animals are a great way to teach children that the things they love dearly, may spontaneously explode" -- Lee Camp
"The poor are there just to scare the shit out of the middle class. Keep 'em showing up at those jobs" George Carlin
The Oz 'poor' actually make the Oz middle class wonder why they bother continuing to show up at those jobs these days perhaps Kulganis?
Veritas - YA BACK! (Skamy will be MOST displeased ... )
Backish
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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(Skamy will be MOST displeased ... 
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