I have nothing against someone wanting to make a quid. But the reality is that price increases, driven by huge investor demand, have been at the cost of the younger generation�s aspirations of owning a home in which to raise their families.
At this stage, it is worth rebutting some of the furfies doing the rounds, from the realestate industry spin doctors, people who bought before the recent skyrocketing of prices and do not fully appreciate the up hill battle now faced by first home buyers, and also from those perhaps feeling a twinge of guilt for having benefited greatly from the huge run-up in prices (few people wish to admit that they have benefited from others' misfortunes, after all.)
To anybody that suggests that the younger generation wants the best and wants it now � and relates that to housing � I suggest that you go out as soon as possible and look at what $3-400,000 buys in your city. Then sit down and ask yourself whether you would a) be able to, and b) feel it is a worthwhile proposition for your family to purchase at these prices � noting that a $300,000 mortgage for 30 years requires monthly repayments of $2,316 at 8%, and $2,727 at 10% (it is appropriate to factor in more rises.) Do not forget to include in your calculations a monthly budget for repairs on the house, because in most areas that range is well below the median price, and the majority of houses will require substantial upkeep over the next few years.
Those that purchased in the 1970�s and 80�s, I am sure you sacrificed in the early days. But you must realize that you were hugely benefited by the much higher inflation levels which, when flowed through to wage increases, rapidly reduced your effective debt burden. With the conquering of the inflation dragon in the 1990�s, today�s first home buyers will not have such significant assistance.
Of course, the greatest furfy of the lot was created by the realestate lobby, and has been perpetuated by every Federal Government since Keating and Hawke adopted it to justify why they reinstated negative gearing following pressure from the realestate lobby and investors. Contrary to this spin - which has been so pervasive that it has almost become considered fact - research by Saul Eslake of the ANZ shows that there was no spike in rents throughout Australia when negative gearing was ceased in the late 80's. Writing in the SMH in 2003, Ross Gittins recounted the background and politely suggested that Hawke and Keating "fibbed". Let's call it what was, and remains, an out-and-out lie! |
