Lets talk about housing and homelessness.

[lind9650]

There were 105,237 homeless in 2011 in Australia.

I believe the number has risen enormously since then. This is a disgrace to our country, and the politicians don't want to know about it.

With house sales and rentals at staggering unafordable prices the problem of homeless people will continue to grow..

Something will have to be done to change this. Federal and State Governments give permits for billionaire investments, but don't care that the average working person will never be able to own their own home. Low rental housing for low income families are being pulled down to make room for high rise, multymillion apartmrnts to be built.

I fear and feel for the younger generation, for the future of our grandchildren and their children. How can a young couple on average wages save AU$200,000.- for a deposit towards a housing loan when their rent is AU$450.- per week or more? Not everyone has well off parents to help or parents with whom they can live while saving.

What is the answer?

Erica

[chameleon54]

Too much ? Ok here's one for those with shorter attention spans -

The governments could forgo all stamp duty on transfers for first home buyers on the condition banks accepted the stamp duty value as equity for the purpose of loans. This would give first home buyers 3%-4% equity before they even started. It would also help to offset the taxpayer funded concessions investors receive, going some way to levelling the playing field.

It might not be sexy, but it would be simple, quick and effective. 

[lind9650]

It all sounds good and well, but reality is a different kettle of fish.

What sparked my interest and worry about my great-grandchildren was a comparison of how housing prices have risen and how wages were left behind.

I live in a small rural town, so I did not take city living into account.

In 1974 my then husband and I bought a large, three bedroom house on a quarter acre block for AU$7,000.-

His wages were aproximately AU$6,700.- per year.

In 1984 we sold the house for AU$21,000.-, Husbands wages had risen to AU$10,560.- per year.

The housing price had risen x 3, wages had only risen by 50%

The same house sold recently for AU$330,000.-

The same job pays AU$73,000 per year now.

Comparing the difference between income and cost of a house, I wonder how much it will change and how much the differece will be in another 20 to 30 years?

My two eldest great-grandchildren will start Highschool next year, the younger ones have not started to go to School yet. I won't be here anymore to see how they will struggle to become owners of their own home.

Erica

[lind9650]

And here is a little extra about what I was thinking.

http://www.news.com.au/finance/owneroccupiers-become-minority-as-younger-generation-struggle-to-buy-...

The future does not look to bright for the Australian Dream.

Erica

[chameleon54]

So who actually owns all of these houses ????   If it is wealthy over 65 baby boomers as the article above suggests, they are coming to the twilight years of their lives. As they get too old to bother with rental houses and move themselves into retirment villages and rest homes, will there be a sudden flood of houses onto the market ? 

Will this cause a correction in house prices, particularly if the generous negative gearing rules where changed to stop new investors competing with genuine owner occupiers  ? Will the baby boomers start to pass away and pass on some of their wealth to the next generation of house hunters ?

In the past I have invested heavily in housing and also traded shares full time during the crash around 8 years ago. The share market was highly volatile and unstable, making it a perect trading enviroment. Trading decisions where based on charting or graph tecniques to follow long term cycles and smaller cycles within cycles as well as anomolies thrown up by the investment chaos, such as extensive capital raisings at heavy discounts to traded share prices .

Investable commodities follow price cycles based on human greed and fear. I suspect we are entering a period of fragile confidence in the housing investment market, that could well preceed large falls in house prices should we see global shocks to the world economy or rising unemployment and a recession locally in Australia. 

While there has definately been structural changes to house prices brought on by increased population and increased rules and regulations, there is still a cyclical element of boom and bust bubbles affecting housing prices. I,m not convinced that house prices will continue spiralling out of control indefinately.

[bella_again]

I think perhaps the other factor to consider is the tightening of bank loans to potential buyers.  There are a lot more restrictions in place now that were not there 5 or even 10 years ago.  A lot of jobs don't provide a contract for longer than 6 - 12 months, this creates a lot of issues for people. Those on centrelink or part benefits can not easily apply for loans even if they can afford the repayments so there are more issues around the affordability of housing than ever before.

An hour away from me there is a high percentage of homeless who are unable to access rental properties because even though we are semi rural and a major centre, there are not enough available housing in the area.  There are long queues for emergency housing.  Some countries were encouraging long term leases for tenants and they are finding this is working. The problem even where we are is that the average house even in this area, (Alpine area of Vic) means you still pay for most houses over 200 rent a week, those on benefits can barely afford to survive.  

I think moving into the future we need a multifaceted approach, more public housing designed in a way where problematic people are not place or in one small area creating a cycle that is difficult to break, life long leases where possible and a re vamp of the whole system. I think low cost home loans should be available for people where payments are taken out at a ratio where they can still afford to live but in a way they can never default on a loan.  This is cheaper than providing public housing and means the rent money is actually putting a longer term roof over their heads.

There is no simple formula but I think if a think tank can come up with multiple solutions we may out of that have an answer into the future.