The Australian Housing Crisis 2009

After highlighting concerns over housing shortages and affordability on recent threads I was contacted and asked if I could post the following for discussion.  The person would like to remain anonymous, however, they did feel that ‘many of the caring and intelligent people who visit ‘Blogocrats’, not my words, would offer honest feedback and put forward potential solutions.

Here are the key facts from ‘Issues in Society’:

The Housing Crisis

Volume 284, Issues in Society, 2009
* The average house price in the capital cities is now equivalent to over seven years of average earnings; up from three in the 1950s to the early 1980s.
* Around two-thirds of households in the lowest 40% of the income distribution with a mortgage or renting are spending over 30% of their income on housing, the established benchmark for ‘housing stress’.
* The problem of affordability in Australia has been a function of both strong demand and limited supply. Several factors have contributed to the strong demand for housing. They include: higher average real incomes and an increase in the number of double income households; a decrease in the size of the average household due to later marriage, fewer children and increased incidence of separation and divorce; relatively strong population growth underpinned by higher immigration rates; the decline in standard home loan interest rates from the mid-1990s to early 2002 reflecting a low inflation environment; greater availability of credit, including from non-bank lenders; the taxation system’s incentives which have encouraged investment in second and third properties (through negative gearing provisions and the 50% capital gains tax discount) and have benefitted owner-occupiers over renters (through the capital gains and land tax exemptions on owner-occupied housing).
* Income has failed to match the pace of growing house prices, which jumped 400% between 1986 and 2007 while income increased just 120%. According to the report, Australian households needed 7.5 times their annual disposable income to buy a typical house in 2006, up 53% from 1996 when households needed five times annual disposable income.
* Between 1996 and 2006, all Australian states experienced significant drops in housing affordability. New South Wales is Australia’s least affordable state, with homes costing 8.3 times annual disposable household income in 2006, up almost 40% on 1996 figures, while the Northern Territory is the easiest place to buy a house, with house prices just five times median disposable income. Western Australia wasn’t far behind New South Wales, with housing unaffordability increasing 63% to 7.45 times annual disposable income while Tasmania saw the biggest jump, up 65% to 6.1 times annual disposable income.
* Out of all English speaking industrialised countries, Australia has one of the least affordable housing markets, with nearly 90% of areas surveyed considered severely unaffordable.
* Over the past decade outright home ownership dropped from 42.9% to 34.3%. The most dramatic home ownership decline occurred for those aged 45-59. Only 35.8% of this group fully owned a house in 2005-06 compared to 54.4% in 1995-96.
* Older generations are taking more debt into retirement with more than twice as many people aged over 60 paying off a mortgage compared with a decade ago (9.5% in 2006 compared to 4.2% in 1996). This group also experienced the biggest jump in housing stress which almost doubled from 5.3% in 1996 to 9.5% in 2006. Outright home ownership also dropped over the past decade for this group, from 79.6% to 74.5%.
* Recent first home buyers are the most vulnerable to housing stress. This group had the lowest incomes and paid the highest prices for houses due to the current housing boom, putting 62% of first home buyers in housing stress.
* The property shortage has led to rental vacancies dropping to around 1.5% from a 20 year average of around 3.5%. With more tenants than properties, landlords have been able to ratchet up prices.
* Australian Bureau of Statistics data from the 2006 Census shows 105,000 people are homeless across the country. In 2001 the figure was just fewer than 100,000, but Australia’s overall population increase means the rate of 53 homeless people per 10,000 of population has been maintained.
* “The rise in the number of people sleeping rough on our streets – up from 14,158 in 2001 to 16,375 in 2006, an increase of 16% – is particularly damning.”  (Mission Australia’s chief executive Toby Hall)
* “After 17 years of strong economic growth it is unacceptable that 105,000 Australians are homeless on any given night, including 12,000 children.” (Federal Housing Minister Tanya Plibersek)
* The latest ABS figures show that teenage homelessness fell 20.8% between 2001 and 2006, from 22,600 to 17,891.  However, the number of homeless children under 12 increased by 2,192, or 22%, as family homelessness rose from 22,944 people to 26,790.
* A 2007 report by St Vincent de Paul says around 50% of people seeking help from homeless services across Australia are working families who cannot pay the rent.
* A 2007 report by the Housing Industry Association found that by the end of the decade 750,000 Australians will be classified as under rental stress.
* According to a 2008 National Youth Commission report, Australia’s Homeless Youth, the number of homeless teenagers has doubled to 22,000 since 1989, and one in two homeless youths is turned away from emergency shelters every night because services are full.When young adults aged 18 to 25 are counted in, that number rises to 36,000.
* In the past five years, effective early intervention programs have reduced youth homelessness from 26,000 in 2001, but the programs reach only a third of the young people who need them.
* Australia’s Homeless Youth paints a heartbreaking picture of children and young people who are the fall-out of three decades of social and economic change, of families not up to the task of child-rearing because of poverty, mental illness, violence, substance abuse, divorce and neglect; of warring blended families and families at breaking point because of angry, rebellious adolescents.
* Drug use among homeless youth has increased in the past 20 years. The type of drugs used has also changed with the wider availability of stimulants such as ice. Reasons for use centre on self-medication and contact with other users on the streets. Two-thirds of problem users developed their habit once they became homeless, and access to detoxification programs remains limited.

So, do we have a major problem on our hands or don’t we?  Who’s accountable and who’s not for addressing these issues?

How on earth did we let it get so bad?

Over to you


105 Responses

  1. Come on Min, Let loose!

  2. Just for the record I reckon you’re all a pack of bastards (wink)

  3. Let them eat cake. There are still plenty of available bus stops!

  4. Enough already!

    I appreciate your efforts and imput but I don’t want to read about this all the time!!!!. Plenty of economy news/blog’s getting around, take it there for FS

    I’m over this HUGE focus on things financial

    Can we please focus on tits or dicks or something else ?

  5. Um, yeah – wasn’t this meant to be the first week where the financial crisis is discussed in the one thread only. The “housing crisis” as outlined above is pretty strongly related.

    Where is the political posts? We have an alcopops law about to be bounced from the Senate, an election looming in Queensland, Turnbull vs Costello, and a number of other subjects which this blog was built around. Enough with the bloody financial crisis – we got the bloody point weeks ago!

  6. Everyone, this is a legitimate social issue that developed well before the GFC came along.

  7. Have our leaders failed to plan and meet the needs of its citizens?

  8. @John:
    I acknowledge this is a legitimate social issue… hell, I’m having issues because of it. I have been saving for some time (and I am on above average earnings) and still the banks don’t want to talk to me (with govt grants I have $50K!). Seems the threat of “retrenchment” doesn’t enter the mortgage equation but being self-employed (with great revenues) is a Bad Thing ™.

    That said, we have talked about housing along with pretty much every other financial ill that can/has occurred in the current economic climate. In case you haven’t got it yet – most of us are burnt out over the issue and simply don’t want to read/talk more about it.

    You’ve become a one issue poster. This would have been a fine addition to the current “Economic Open Thread”, but you bringing it up in a separate thread seems (to me and at least one other poster) like you are trying to wheedle the subject back into other threads.

  9. Just on alcopops, I have been meaning to get a thread up on it, but cannot find time to do the research (as work is a bit hectic at the moment).

    If anyone wants to put up a thread on it, or to email the address above we will put it up.

  10. Ben

    I appreciate your honest feedback.

  11. Ben

    The person who contacted me is highly regarded and I can’t say in what area, it’s not economics, and they appreciate this topic being raised openly in forum such as this. The GFC has obviously brought highlighted this issue that has been conveniently ignored at state and federal levels for many years now.

  12. …in fact, this issue effects everyone in one way or another. It goes to the heart of our social fabric.

  13. It’s not just alcopops that politically hot at the moment but also legislation dealing with political donations. It’s being reintroduced in the Senate which creates a trigger for a double dissolution. Not that you would know if you relied on the MSM.

    Surely the Opposition wouldn’t want to fight an election on either of these grounds.

  14. “Whose Accountable”

    Many of us are accountable. The rich bosses who increased their wages from 30 times the lowest paid worker in their organisation to 260 times the lowest paid worker. Thereby altering the so called “average wage” statistics forever. The true multiple of earnings for a new home for the average worker is more like 9 or 10 times, not the 7 quoted by statisticians. I speak from analysis of my over 300 clients.

    The citizens by changing their requirements from a 3 bedroom home with 1 loungeroom 1 Kitchen 1 bathroom and 1 dining room, with possibly a verandah. To a mansion containing no less than 4 bedrooms 2 or 3 bathrooms 1 media room 1 study 1 family room 1 formal dining room 1 laundry room 1 sewing room etc etc.

    The change from a social society to a greed society where everyone is for themselves and the keep up with the Jones’s ethic exploding.

    The Government for introducing negative gearing, allowing the wealthy owning investment properties to offset any losses against their other income and therefore giving my tax dollars to those who own more than one property. If they pumped this money into assisting home owners the benefit to society would be far greater.

    We were told that rents have to rise because interest rates were rising. Well those same rates have dropped by almost 50% yet rent is increasing by 10% or more per year. We are now told it is due to low availability. Any excuse will do to screw the renter who has no hope of saving a deposit while paying rent.

    The finance industry for relaxing credit policy in the face of competition to maintain market share and taking on riskier borrowers. Lend Lend Lend. Although this is now starting to reverse.

    The buy it all now society, for telling first home buyers they also need the best of everything in their new home NOW.

    The expectations by borrowers that they should be given loans simply because they have assets. To them it should not matter that they cannot service the loan. A dangerous cocktail of destruction.

    There will always be homeless as there are people that will not better themselves under any circumstances and will simply squander whatever they have and whatever they earn. I have these type of people in my own family.

    The greed of many Real Estate Agents and Mortgage Brokers ( remember I am one of these) who, rather than exercise caution and do the right thing by their clients simply tell them anything to get a sale and the resulting commission.

    Until the equlibrium between the top bosses and the avergage workers comes back into sync and the government stops the negative gearing rort and people get back to the basic home, for their first home requirement, things will not change.

  15. Just a small one John. The above quote suggests that one of the reasons for upward pressure on higher housing prices is

    ..increased incidence of separation and divorce

    I do understand that logically when 1 household separates into 2 households that 2 separate dwellings are required. However, I would have thought that whereas the situation prior to separation was 2 income, this then becomes 2 single incomes therefore having far less ability to save for new homes or being able to cope with the previous mortgage.

    Different scenarios might be: wealthy who can afford following separation to easily afford another dwelling. Middle income where (usually the female partner) keeps the house and can afford future repayments. However, the male partner now has to rent. Lower income and also situations where there is little equity in the house, the house must be sold and so both partners are forced to rent.

    I should imagine that the latter 2 scenarios are by far the more common. Which in my own convoluted way gets me back to my point. I would have thought that the upward pressure on house prices via separated families would have been cancelled out by the downward pressure on lower incomes experienced by separated families.

  16. Thread up now on alcopops and electoral reform.

  17. @John:
    I’m always honest. I am also, usually, as polite as I possibly can be (even if calling them brain-dead dipshits; thankfully not something I need to attempt in this blog *laugh*).

    I do understand where you are coming from, and I do understand the seriousness of the subject(s) you have chosen to push. It’s just that we’ve talked almost nothing else but economic/financial crises and wine selections for well over a month now.

    Perhaps a thread on “Senate Rejections” of legislation is in order. Not only can we debate the pros & cons of the legislation being rejected, but there is also the concept of rubber-stamping vs amendments in the Senate, the idea of a double dissolution on the idea of political donations, and where the so called “independent senators” really sit in the political landscape (sorry, but I don’t think any one but the true believers of the “Great Beardy Sky Man” think of him as anything but a Liberal).

    These were the subjects and discussions that attracted me to Blogocracy & Blogocrats in the first place. Would also give my fine opponents in the “general right” political spectrum (Tom of Melbourne, being a prime example) a new set of subjects on which we can all debate 🙂

    joni: new thread is up!

  18. Ben

    I’m always honest. I am also, usually, as polite as I possibly can be (even if calling them brain-dead dipshits; thankfully not something I need to attempt in this blog *laugh*).

    I do understand where you are coming from, and I do understand the seriousness of the subject(s) you have chosen to push. It’s just that we’ve talked almost nothing else but economic/financial crises and wine selections for well over a month now.

    Fully appreciated Ben. After being asked on this occasion, I really felt an obligation. I’m a passionate bastard at times I know. Like I said, I really appreciate honesty and I do so even more when it’s framed respectfully. Cheers.

    Damn, I’m starting to feel like one of those alcopops.

  19. Min

    It certainly is a complex and convoluted issue that doesn’t always lend itself to linear-analysis. It’s very dynamic which simply because it’s about as broad a socio – economic issue as you can get. My guess is that its been placed in the too hard basket by politicians because they’ve always thought it would end up as someone else’s problem down the track.

    Consider the spending required to deal with it.

  20. Shane

    Really thorough and comprehensive feedback, much appreciated. I was hoping you’d put your hat in the ring. Thanks.


    Shane’s response goes a long way to pointing out just how complex and imbalanced things have become, don’t you think?

  21. I certainly agree John, Shane’s response is as always well thought out and gets to the point.

    To me, the VIP things that Shane has pointed out are:

    An end to negative gearing – however this no doubt would result in screams of protest from developers and the building industry. What about..end negative gearing except for new dwellings. Wasn’t that the idea in the first place, that negative gearing would encourage new constructions, but instead it resulted in churning.

    Re people getting back to the basic home. This gets back to the banks via their requirements of X deposit and a provable income and that housing repayments should not take more than 30% of income. Goes back a while but I think that it used to be 5% or 6% deposit, a proven savings history (could be a shock to the young’uns!) plus 2 years continuous employment.

    Very obviously if one has to save say 5% deposit and be able to fulfill the above criteria then Mr & Ms Average (or Mr & Mr/Ms& Ms Average) are not going to qualify to buy an $800,000 McMansion and will have to resume buying back-to-basics housing.

    The above also puts pressure on developers, because if they continue to build McMansions, then they’re not going to be able to sell them. Which I think is what is happening around about now.

  22. Min, the deposit requirement was 10%, proven savings record and repayments not exceeding 25% of nett income.

    The original government scheme for first home buyers was called the Home Savings Grant (my emphasis). To qualify, applicants had to hold an earmarked savings account for 2 years, have signed a contract to purchase a house and not have previously owned or had an interest in a house. Applicants did not have to be married.

    At the time that I worked in the section, the grant was paid on a sliding scale depending on how much was saved over the 2 year period. To qualify for the maximum grant of $750, you had to save $2,000, although I believe it was increased to $2,000 before the scheme ended.

    You couldn’t include the grant in deposit calculations at the time, either, so the grant could be used to increase equity or furnish your house.

    Of course, $750 didn’t completely furnish a house, but it helped and we put up with the army blankets at the windows and furniture hand-me-downs until we saved enough to pay for them. Houses were more a more modest size then, but the trend for larger rooms, at least 2 bathrooms, separate laundry and a family room was starting when we built our first house.

  23. Sorry, should have read Home Savings Grant.

  24. OK, bolding didn’t work. ;-(

  25. Hi Jane..I was going to back..waaay back to 1976. We had to save $6,000 for a $20,000 loan before the Commonwealth Bank would give us a loan even though we had a block of land to build on in Lilydale. That one cost us $9,000, 864sqm (minimum density in those days). We paid it off while we were engaged and still living at home.

    **However, thinking about it, we might have had to have had a larger deposit because we hadn’t saved for long enough.

    We were able to build our 3br dream home resplendant with 2-way bathroom by doing a deal with the builder such as by painting the house ourselves and by sanding the floor boards ourselves (literally). By this time eldest had come along and so I spent each of her sleep-times puttying in nail holes. Our divan came from my Auntie fact most things came from my Auntie May. In fact my Auntie May might be considered a very early version of EBay 😉

  26. Where the hell’s McPhilbin; having another mental dump?


  27. I can’t offer anything on how we got to where we are now but it does seem to me that the extremely competitive nature of the rental market at the moment isn’t helping improve the situation.

    A friend a work told me the other day that her partner has been renting the same house for 6 years and the rent has gone up every 6 months like clockwork. I’m not sure how much they’ve gone up by each time but that seems a little excessive to me. Makes it hard to pay the rent and squirrel away enough for a deposit.

  28. To the other reasons given I would add the gutting of the public housing sector as another factor that added to the bubble simply because it forced more people onto the private market.
    As for the first homeowner’s grant and its recent doubling and tripling – what were they thinking?

  29. nic t

    As for the first homeowner’s grant and its recent doubling and tripling – what were they thinking?

    Nic look at the ages of this couple and the loan amount even with grants. Insane alright.

    For Domenico Monardo, 21, and his girlfriend, Carla Hirigoyen, 20, the $21,000 in federal and $3000 in NSW government grants they received was a big incentive to build a new house rather than purchase an established one. The couple recently paid $305,000 for a 594sqm block of land at The Ponds, a new Landcom development near Kellyville in Sydney’s northwest.

    They will borrow a further $240,000 to build their dream home.

  30. Deb

    A friend a work told me the other day that her partner has been renting the same house for 6 years and the rent has gone up every 6 months like clockwork. I’m not sure how much they’ve gone up by each time but that seems a little excessive to me. Makes it hard to pay the rent and squirrel away enough for a deposit

    It’s become too common.

  31. Tony

    Up your nose with a rubber hose (wink)

  32. John McPhilbin, on March 17th, 2009 at 5:39 pm

    What is their income JMc? That’s over half a million dollars debt…and look at the “commitment” history – they aren’t even married…

  33. TB

    What is their income JMc? That’s over half a million dollars debt…and look at the “commitment” history – they aren’t even married…

    I’d love to know what their incomes are, and I’m guessing even combined it’s not huge. I hope they’re not planning on having kids anytime soon. Who knows, their parent may be well off and, but we can only assume that’s not the case, because there are so many like them getting these insane loans.

  34. Without being too much of a stickynose..what is the value of a house around your areas? And could a young couple (married or otherwise) afford even a unit around your neck of the woods? This is not saying that you live in a yuppy upmarket area, but rather that even a unit in a reasonable area, close to schools and shops has become unaffordable.

  35. TB

    Around two-thirds of households in the lowest 40% of the income distribution with a mortgage or renting are spending over 30% of their income on housing, the established benchmark for ‘housing stress

    I keep hearing that it’s the middle to high end who are being effected and that’s just not the case.

    Remember the revelation by the RBA last year, well banks are obviously still pushing the envelope:

    THE BIG LIE EXPOSED: Big banks ignored sub-prime troubles
    Posted on October 13, 2008 by johnmcphilbin

    Sean Parnell, FOI editor of the AUSTRALIAN writes today:

    AUSTRALIA’S big banks ignored the sub-prime crisis in the US and actively took greater risks in the home mortgage market to see off a challenge from rival lenders.

    The banks not only relaxed their lending standards in recent years – ultimately luring many customers into financial distress – but held off tightening their terms of credit to build a better market position.

    Reserve Bank documents, obtained by The Australian using Freedom of Information laws, show the change in lending standards was driven by competition and the housing boom.

    In the last six months of last year, banks informed the Reserve Bank that the proportion of new mortgages described as non-standard – such as low-document loans and those with high loan-to-valuation ratios – was increasing.

    That was despite the sub-prime crisis, rising interest rates and evidence that more of their existing mortgage customers were unable to make repayments.

    In April this year, as the Reserve Bank ended its run of interest rate rises, an RBA analysis found the relaxation of lending standards had allowed some Australians to take on extraordinary debts. Households with annual incomes of $60,000 or more could borrow up to five times their annual income – up from 4 1/2 times in 2004 – requiring repayments of about 50 per cent of gross income, up from 45 per cent in 2004 and well above the common cut-off point that lenders applied of 30 per cent.

    Single individuals could borrow amounts requiring repayments of 50-75 per cent of their net income, about 5 per cent higher than in 2004.

    Although most borrowers had not utilised their greater borrowing capacity, the analysis found “recent low-income home buyers do appear to have taken on relatively larger loans”.

    The median mortgage debt servicing ratio – the proportion of income spent on a mortgage – for recent mortgagors had risen from 20 per cent in 2003-04 to 22 per cent in 2005-06 and had been “accompanied by an increase in financial stress”.

    Based on income scales, the largest increase, 4 per cent, came from lower-income households and first-home owners.

    The analysis noted that new and poorer mortgagors had increasingly found themselves in financial trouble; since 2004 there had been a gradual increase in the proportion of loans that were at least 90 days in arrears.

    A follow-up analysis in July this year, based on data collected in May, found that for households earning $90,000 or more, their borrowing capacity had fallen by 6per cent since late last year. But most of that was due to rising interest rates as lending standards were “still much looser than in 2004″.

    That month, the Reserve Bank’s financial stability department also warned that the relaxation of standards, and particularly the rapid growth in low-document loans, “may mean that the average borrower in arrears is now less able to ’self-cure’ than in the past”.

  36. Min

    In Sydney’s West many housing prices have been tumbling in some areas, however, they are still at levels that require much larger loans than a few short years ago to buy.

  37. John McPhilbin, on March 17th, 2009 at 5:45 pm:

    A simple case for tightening regulations again I would say …

    eg 10% deposit and 25% of gross income, only, to pay off a loan…that seemed to work for those greedy baby boomers trying to get ahead in the 60’s…

    …remember? The days when you had to have at least $1500 in a savings account to be eligible for $500 first home buyer’s grant…(new home only, I think)

    …between 1968 (when we got married) it took ,The Minister, and me, three years to pay off and sell a block of land to make the $1500…that gave us a deposit on a $12,000 home (1971-72)…earning $55-75 a week…(apart from two years in the army – 70-71 at $80 a fortnight…note – halved our income…)

    ..two kids to support and The Minister mowed neighbours lawns (sorry, KL, that’s life) for $5…I did tune ups on cars on the weekend…@ $20 a pop…sang at the local RSLs and earned $70 for 2×20 minute spots (as much as a week’s wage) but it wasn’t regular enough…

    …it was called earning your way then…

  38. Hi Min. I’m talking the same time frame as you. My first husband and I built our house around 1972-double brick, split level, 3br, 2 bath house (all the rage) for about $23,000 including the block, which we paid off before we built.

    Our block was the traditional 1/4 acre but only cost $2,500 as it was in a new subdivision in the north-east. For $9,000 we could have lived in the flashest suburb in town! You chaps must have been saving like mad-men!

    I guess the house was fairly expensive at the time, but we both had pretty good jobs and were prepared to wait to get the stuff.

    I made the curtains and picked up 2nd hand furniture to do-up. We did splurge a bit on the (blush) purple lounge suite and the dining table, which were new.

    The dining chairs belonged to my grandma and my other grandmother and I re-upholstered them. She came from a long line of amateur interior designers and even during the depression was constantly painting and decorating and shifting and doing-up furniture. My mother was also a mad decorator, so between the two of them, my house looked pretty good on a shoe string.

    I used to make most of my clothes back then, but these days it’s much cheaper to buy off the rack.

    I’m glad I don’t have to try to buy a house these days and I feel very sorry for young ones trying to get a toe hold on the property ladder.

  39. TB

    See, it should be really that simple shouldn’t it. I completely agree.

    A simple case for tightening regulations again I would say …

    eg 10% deposit and 25% of gross income, only, to pay off a loan…that seemed to work for those greedy baby boomers trying to get ahead in the 60’s…

    …remember? The days when you had to have at least $1500 in a savings account to be eligible for $500 first home buyer’s grant…(new home only, I think)

    …between 1968 (when we got married) it took ,The Minister, and me, three years to pay off and sell a block of land to make the $1500…that gave us a deposit on a $12,000 home (1971-72)…earning $55-75 a week…(apart from two years in the army – 70-71 at $80 a fortnight…note – halved our income…)

    ..two kids to support and The Minister mowed neighbours lawns (sorry, KL, that’s life) for $5…I did tune ups on cars on the weekend…@ $20 a pop…sang at the local RSLs and earned $70 for 2×20 minute spots (as much as a week’s wage) but it wasn’t regular enough…

    …it was called earning your way then…

    Now the reality is this:

    Household finances take beating

    Australians’ finances are ”significantly worse” than they were two years ago, as families pay down debts and save as much as possible amid growing economic worries.

    The Melbourne Institute household financial index eased 2.2% in the year to March, dropping to 27.9 index points from 30.9 in March 2008, in trend terms, as consumers respond to a slowing economy and a higher risk of job losses.

    That compares to 41.3 points in March of 2007 when companies were searching for staff and demand for Australian resources was high.

    The average value of the index has plunged to 29.9% in the two years to March, the Melbourne Institute said, down from 42.3% over the sample period of March 2004 to December 2006.

    “This indicates that since March 2007, more Australian households have been in a significantly worse financial position,” said Melbourne Institute professor Guay Lim in a statement

  40. jane, on March 17th, 2009 at 11:28 pm Apologies for being so late in replying Jane. I only just found this. But Jane purple was just soo trendy in those days. Friends of ours ended up with tomato red shag-pile carpet throughout.

    My favorite piece is a writing desk which came from my Auntie and Uncle’s house. It was used to store paint under their house. Easy I thought, and out with the paint-stripper. Top several layers, not a problem. Bottom layer, big problem as it was very old lead based paint which turns to glue if you apply paint stripper. I am sitting here looking at it as I write..came up rather nice (eventually) via lots of intensive sanding, stain and old fashioned shellac.

  41. It was only a matter of time before the real figures reflecting the real hardships started coming through.

    Bankruptcy rates rise for middle class

    Personal insolvencies have jumped 12% in the past year, running at more than triple the pace of the last recession, exposing the financial frailty of more middle-income earners, a broad survey of bankruptcy trend over the past two decades.

  42. Bravo! At least it’s a start in the right direction

    Up to 5000 new cheap rental homes due on Sydney market,22049,25259218-5001021,00.html
    By Joe Hildebrand

    March 30, 2009 12:00am

    UP to 5000 new cheap rental homes are expected come on to the Sydney market over the next year as part of an Australia-first scheme that could cut suburban battlers’ rent by more than half.

    Already more than 1000 individuals and families have had their rent slashed, with some paying only around a third of market rates for a new home.

    The Federal Government scheme gives developers, investors and/or community housing providers up to $8000 a year to knock a minimum 20 per cent off the market rental rate for low-income earners.

    Almost 4000 new spots are expected to be announced today – with 1074 going to NSW – and a further 20,000 applications have been received. If even half of these are approved Sydney and NSW stand to get between 3000 and 4000 more places by July 2010.

    In the first round a third of applications were successful however this proportion is expected to rise.

  43. Absolutely John..

    This is what I’ve been talking about. That there needs to be a lower common denominator.

    And now as per your link, we have (a start) re affordable housing and it is therefore a challenge to the market to come down to meet this market.

    In the Howard years there was no competition and with no competition then costs just went up and up and up. I think that a big problem was Howard’s difficulty with accepting that people who were low paid shouldn’t just ‘try harder’.

  44. We got it Min (wink). A huge Howard Government denial for sure.

  45. Does this mean John that it’s group hug time??

  46. Min

    I think it’s just you and me sweetheart (wink)

  47. Min

    Just in “The scheme is scheduled to run for 10 years”

    Govt announces affordable rental funding
    March 30, 2009 – 1:19PM

    The construction of nearly 4,000 affordable rental homes will be funded under the first round of a federal government scheme.

    Investors will receive $8,000 for each eligible home they build for low and middle-income families under the National Affordable Rental Scheme.

    Federal Housing Minister Tanya Plibersek, in announcing funding for 3,899 homes, says approval comes at a time when the building and construction sectors “need it most”, referring to the economic slowdown.

    NSW has the largest slice of funding with 1,074 homes approved followed by Victoria (696), Queensland (663), Tasmania (587), Western Australia (401), South Australia (422) and the ACT (56).

    Interest in the second round of funding applications – which closed last Friday – was also very strong, Ms Plibersek said.

    The scheme aims to improve affordability in the private rental sector by requiring rents to be at least 20 per cent below market value to tenants who meet income eligibility criteria.

  48. At least you are a little more attractive now than some other (eww) avatars.

  49. John

    CBA has just put the brakes on First Home Buying in a big way. From today they will only lend 90% of the value of a home and the applicant must have 5% genuine savings accumulated over 3 months or longer. FHOG will not be accepted as genuine savings.

    This has good and bad implications.

    John you will be happy to know that no longer will the FHOG applicants be able to buy a home, so now they do not have to panic about the loss of their job or the market freefall being prophecised.

    They will now be free to join the rental mob because they will never be able to save the 5% required while paying massive rentals with rentals forecast to increase by a further 20%.

    The other ramicification of this will be the decimation of employment for the self employed tradies in the building industry as the FHOG opportuinity now grinds to a startling halt.

  50. I mentioned this a wee bit earlier, but probably got lost. The FHOG is supposed to end June 30th. And so what will take it’s place? Recent statements from Ms Plibersek suggest that any future dollars will be aimed at the lower end of the market.

    This is just me, but housing affordability is linked to rental affordability. When it becomes cheaper for people to buy rather than rent, then obviously people will decide to purchase.

    When rentals become cheaper = pressure for rentals to become lower = pressure on making housing (purchasers) more affordable. Market pressure and all that.

    As above, and the Howard years, no pressure on anything to become cheaper just higher and higher. Shock horror, can’t have that because all of the people with investment properties would have been camping on Howard’s door asking WHY. As per worries about personal debt because your assets are now worth more.

  51. You’re spot on Min. Think of how many people now have multiple investment properties and have been able to jack up rents to meet their obligations. Down come rents and the pressure is really on. Few people realise that housing prices over the long term roughly follow inflation and wages growth.

    Time to come back down to earth.

  52. Shane

    My argument has always been and will always remain on the side of affordability Shane. Hopefully housing prices and rents will come down to more affordable levels and honest decent brokers such as yourself will always be in demand. That’s what I’m hoping.

  53. John, here are some stats that don’t spell doom and gloom.

    1. The ABS official House price Index shows that house prices in Australia’s capital cities fell 1.8% in the September quarter of 2008, however prices were still 2.8% higher than they were in September 2007.

    2. The median mortgage in Australia is $250,000. The median home price across Australian capital cities is $450,000.

    3. Construction costs will fall because of the global diminished demand for commodities, such as steel.

    I’m taking these from the February issue of Australian Property Investor, and time permitting I could type merrily away with a raft of positives. I’m not sure if there is a link anywhere to the article titled Property Market Health Check, but it is worth a read if you want to look at the property market froma different angle. But brace yourself: it’s happy reading.

  54. John, to show you that I’m not all evil, the wife and I rent out a Townsville house to a single mother for $60 a week below the market rate.

    The tennant is also unemployed.

    Whilst the wife and I are serious about getting a good nest egg together, we’re not in the business of screwing the less fortunate.

  55. Migs

    I didn’t say it was all doom and gloom, simply prices and rents need to become more affordable across the board. That alone will ensure downward pressure. Where the bottom will be is anyone’s guess.

  56. Migs

    I’ve never for one minute thought of you as a despicable landlord. Far from it. I know you’re heavily invested as a result of previous misfortunes and I sincerely hope that sensible people such as yourself come through okay.

  57. John, wahtever you do, don’t listen to this bloke (or the author).,28323,25223797-5013951,00.html

  58. Despite that Milne and Keen say we’re heading to our own subprime crisis, consider the facts:

    Subprime loans involve providing credit to higher-risk borrowers who don’t meet the criteria for a traditional, or prime, loan.

    The increase in foreclosures in the subprime market has been the primary source on downward pressure on American house prices.

    Mortgagees in possession will sell at any price because they don’t want to keep their house, they want to get at least some of their money back as soon as possible. That is now happening on an unprecedened scale in America. But this is unlikely to happen in Australia.

    One of the reasons for that is that there has been far less imprudent lending here than in America.

    Non-conforming loans, which are the closest thing Australia has to subprime loans, represent about 1% of all outstanding mortgages in Australia, as against 15% in the US. Low doc and no doc loans account for another 7% of loans in Australia, whereas in the US 15-20% of loans are low doc no doc.

  59. John

    The problem I have with your comments regarding hoping rents come down. I have never seen rents reduce in the housing market since I became a renter in 1980.

    I was never offered lower rent and at the moment people are out bidding each other in the rental wars.

    While it would be nice, can you give me actual details of a time in the last 30 years where rents have reduced in the housing market ?

    You rent or buy what else is there ?

  60. There’s been numerous reports of rents skyrocketing and ample people to attest to that fact.

  61. By way of example Shane, from as far back as 2007.

    Rent crisis taking psychological toll
    October 03, 2007 12:00am,22049,22519486-5013110,00.html
    THE rental crisis is having negative psychological effects on tenants, with a growing number reporting rent-associated depression and anxiety.

    About one in three Australians rent and the survey by showed 89 per cent of renters reported experiencing negative psychological effects directly related to the rental climate.

    Fifty-nine per cent of renters expressed “anxiety” over their renting predicament. Forty-one per cent felt “helpless” in their rental situation and one in five said they felt rage and fury over their situation.

    Psychologist Darryl Cross said psychological conditions associated with being a renter were a growing problem.

    “It’s a situation that can push people into a sense of hopelessness or desperation,” he said.

    Only 11 per cent of renters are happy with their current accommodation and only 4 per cent feel well cared for by their landlords, the survey found.

    Petrina Frost developed anxiety attacks after a series of maintenance issues and problems with the property manager at her former flat.

    The 39-year-old change manager said she had been happy at her old Woollahra flat, where she had lived for four years, until the property manager decided to increase the rent without fixing a litany of maintenance issues including a ceiling that leaked about two litres of water a day.

    “We had an inspection and they were like, ‘Oh yes, we’ll fix that and we’ll fix this’ – they didn’t but they put the rent up (from $225 to $285),” she said.

    But even with a shortage of good accommodation and rents rising by 9 per cent during 2007, the majority of respondents said they would rather stay in less than ideal rental properties then go back into the market.

  62. April 2008

    Rental crisis looming?
    Australian Property Monitors’ (APM) recent rental report shows that asking rents have increased rapidly over the last year in most Australian capitals. There are some key reasons why I am so pessimistic.

    To start with let’s look at the supply side. APM’s latest figures show that the rental market is still tight as a drum. We have recently recorded the lowest amount of rental ads in the five years that we have been compiling the series. Rental properties are very tightly held at the moment which reduces overall turnover. Also, agents can fill vacancies without little effort. An example of this is in February the REINSW recorded a rental vacancy rate under 1% (.09%) for the first time. Simply put, there is very little available rental stock in Sydney.

    This issue of supply pressures in the rental market will endure. As the nation’s population continues to grow, our building and construction sector will struggle to keep up the supply. Given the lag from approval to completion in construction, the flow-on effects are likely to continue throughout the rest of this decade and beyond. This is not good news for renters.

    Deteriorating affordability doesn’t help. Instead of happily buying affordable properties in the suburbs, a new generation will rather rent where they want to live – in the city where the action is. Generation Y (today’s 20 somethings) simply don’t hold home ownership in the same reverence as their parents. So, a lifetime of renting for some will be a lifestyle choice. Perhaps this marks the beginning of a slow death of the great Australian dream. Besides, their savings are earning good interest in term deposits if they haven’t already spent it all on plasma screens.

    My advice for renters is they should lock in their current arrangements for as long as they can to try and stem the flow of “nasty” letters from landlords.”

  63. Melbourne 2008

    Rent crisis forces urgent action
    Jason Dowling
    February 17, 2008

    THE State Government has announced new fast-track home building rules as Melbourne rents jump 12.7% in just 12 months.

    The rent rise is more than double the previous year’s increase and almost three times the average annual increase over the past eight years.

    The increase has pushed the proportion of rental properties that can be afforded by low-income earners down to just 25.2% — the lowest rate in eight years, the Victorian Office of Housing rental report for the September 2007 quarter shows.

    The rental crisis has become so critical that federal, state and territory housing ministers will meet in Sydney on Wednesday to discuss the problem.

  64. John

    Please re read my comments to you I asked for evidence of rentals going down not up. Rentals going down appears to be one of your answers to our problem. What I am pointing out is that rentals have remained higher during both boom and bust times before and now.

    The only way to relieve rents is for people to own their own home. If this is denied them, rentals will continue to soar due to demand.

    What I cannot understand is why you think it is a bigger disaster for a home owner to lose their job and have to make payments than for a renter to lose their job and have to make rental payments.

    A bank does have some sympathy and will give holidays in payments and also accept interest only if this can be afforded. They are also governed by the CCC which is draconian in certain aspects towards Banks.

    Have you ever tried to ask a land lord to forgo payment for a few months while you look for another job.

  65. What I cannot understand is why you think it is a bigger disaster for a home owner to lose their job and have to make payments than for a renter to lose their job and have to make rental payments

    Me too..

  66. Shane

    The only way to relieve rents is for people to own their own home. If this is denied them, rentals will continue to soar due to demand.

    You assume everyone has the ability to afford to own their own home. There has to be a balance of public and private housing available to meet the needs of communities.

    The more people are bogged down with rental and/or mortgage stress the less money they have available for other things – it’s these other things that keep many people in jobs, instead much of this income is siphoned off to banks and landlords. It’s all part of the private debt trap.

  67. Shane

    What I cannot understand is why you think it is a bigger disaster for a home owner to lose their job and have to make payments than for a renter to lose their job and have to
    make rental payments

    Both would be disasters would they not? I think you assumed that one was bigger than the other.

    Nice one reb Lol Me Too

  68. John

    I do not assume that everyone has the ability to afford their own home. It is you who wishes to take the possibility away from people on the perhaps, that they might lose their job.

    You still failed to answer me why a person who pays $500 per week rent is better than someone paying $500 a week in loan repayments if either lose their job.

    Private debt trap or not a person paying a loan is slowly owning something, a person paying rent is captive to the landlord forever.

  69. How many landlords rely on rental income to pay their mortgages? I’d say a fair whack! The pressure for many sees mortgage repayments dependent on rental income.

  70. Who’s better than who Shane, the issue is affordability. To assume that someone is better off buying because their rent (being inflated by a shortage of housing) is better off buying is nonsense. Now we’re going around in circles.

    If a house is deemed affordable then sure, why not take the plunge. But if the rent you’re paying is taking its toll then jumping in and buying and paying off a mortgage that will cause the same stress is a wee bit silly.

    We have many people who are low paid workers who simply cannot afford to buy or rent without suffering significantly.

  71. I would assume that most landlords rely on rental income as well as income from their job. But if I had to lose one, I would say it is the rental income. It is far easier to find a new tennant that it is to find a new job.

  72. It’s certainly a complex mix when considering employment and housing affordability.

    More to joblessness than official estimate of unemployment
    By Garry Shilson-Josling, AAP Economist

    SYDNEY, March 27 AAP – The number officially unemployed is heading toward 600,000, but there are many more than that who are without jobs and want to work.

    Every year the Australian Bureau of Statistics (ABS) publishes its estimates of people of working age not in the labour force, or NILFs as they are known within the bureau.

    To know how someone would end up being tagged an NILF, you first have to know how the labour force is defined.

    It consists of the employed and the unemployed.

    So it may be something of a surprise to find that, as at September last year, there were no fewer than 1.54 million people 15 years and older who were jobless and wanting to work but who were not counted as unemployed, ABS figures released on Friday show.

    This was more than triple the number, 483,000, fitting the official definition of unemployed in September.

    Since then the global credit crunch has caused the labour market to deteriorate markedly, lifting the number unemployed by around 100,000, but the total – 590,500 after seasonal adjustment in March – will still be dwarfed by the number of jobless NILFs.

    The key to this apparent puzzle is that the definition of unemployment, in line with international conventions, is fairly narrow although, contrary to popular belief, it has nothing whatsoever to do with eligibility for social welfare benefits.

    To be counted by the ABS as unemployed, someone must be 15 years or older and must not have worked during the reference week of the monthly ABS survey, not even for an hour, and not even as an unpaid helper in a family farm or business.

    As well, they must have sought work in the preceding four weeks, or have a new job lined up to begin within four weeks.

    In either case, they must have been ready to start work during the reference week if the opportunity presented itself.

    One quirk of this definition is that the majority of unemployed youth are in fact full-time secondary or tertiary students.

    Whatever else they do with their time is irrelevant – the definition revolves solely around whether they were employed, whether they looked for work, and whether they were ready to start.

    There are obviously plenty of ways for someone to fall outside this definition and to be jobless but not officially unemployed.

    In September, for example, there were 47,600 jobseekers fitting all the criteria of unemployment expect that they were ready to start within four weeks, rather than in the survey reference week.

    A further 22,600, also actively hunting for a job, would not be ready until after four weeks.

    A further 1.11 million had not actively looked for work in the previous four weeks, even though they wanted to work.

    Of those, 750,000 were ready to clock on within four weeks.

    And of those, 73,900 were so-called discouraged jobseekers, those who had given up working because they had come to the conclusion there were no jobs available for them, almost half because they were considered too old.

    Of the other 676,100, nearly half – 323,500 – cited personal reasons for not looking for a job.

    That included 160,000 saying they were attending an educational institution.

    Others totalling 226,700 said they had not looked for a job, even though they wanted one, for family reasons.

    Caring for children was the most common family reason, with 143,400 in this group.

    These figures do not cover another form of hidden unemployment known as underemployment, where workers are employed but want more hours of work.

    In a publication released last month, the ABS said there were 687,700 part-time workers who would have preferred more hours, including 349,200 wanting to work full-time.

    That adds up to well over two million falling outside the official definition of unemployed, but wanting more work than they are currently undertaking

  73. Guess who’s been reading my threads? Lol

    Low-cost rentals, development push housing costs lower,22049,25285029-5013110,00.html
    By Joe Hildebrand and Justin Vallejo

    April 04, 2009 12:00am

    SYDNEY housing costs are to tumble with governments pumping more than $200 million into new discount rental properties and developers unlocking vast tracts of land for new homes.

    The Federal and State Governments will today unleash $225 million on more than 800 new low-cost homes as part of Kevin Rudd’s economic stimulus package.

    Work will begin immediately and the houses will be ready for tenants in a little over a year.

    The 851 homes will be targeted at low-income residents and operated by community housing groups.

    “We knew we needed to move quickly in order for the stimulus package to work so we asked the NSW Government to provide us with a list of projects which could be fast-tracked so work could begin immediately,” Federal Housing Minister Tanya Plibersek said.

    Premier Nathan Rees said the move would also prop up about2000 construction industry jobs.

    “We’ve hit the ground running because we know we need to move quickly to take advantage of this unprecedented opportunity,” he said.

    At the same time developers are throwing the doors open to their controversial “land banks” in an attempt to cash in on unprecedented demand from first-home buyers.

    The tracts of land sitting vacant in the city’s northwest and southwest for years – artificially keeping supplies low and prices high – are suddenly being rushed to the market ahead of schedule.

    The latest land release to be “fast-tracked” will go on sale from today at Minto after the first release of 36 lots almost sold out.

    It follows another early release last week in The Ponds, near Kellyville, that had home buyers camping out overnight to secure the biggest blocks in the best locations.

    Developers began holding back the release of land in the hope of restricting supply to avoiding a price landslide when the city’s boom-times ended in a property market slump.

    But with increased first home buyers grants and low interest rates creating a sudden but short window of demand before the July deadline, developers are throwing the doors wide open to their “land banks” while they have the chance.

    “There were significant stock levels when the increased first home buyers grant was announced,” NSW’s biggest developer Landcom’s general manager of marketing Rob Sullivan said.

    “It is (releasing the land banks). This artificial stimulus has brought the releases forward.”

  74. Well they’ve got to get their ideas from somewhere 😉

  75. See Min, we had it mailed from the beginning (wink).

  76. Mailed? I meant ‘nailed. Actually emailed the post to a few people and they were grateful for the feedback.

  77. It didn’t take long for the first-home grant to push housing prices back to unaffordable levels for many Min.I’m with JPMorgan chief economist Stephen Walters on the outlook, in fact, a decline of 10% may be too optimistic. Lets see how the economy travels.

    First-home grant hit by price jump,25197,25287000-2702,00.html

    HOUSING prices at the lower end of the market have soared by as much as $20,000 since the Government more than doubled the first-home owners grant late last year.

    The jump in prices, particularly in hard-hit areas such as western Sydney, has wiped out the benefit of the grant, which amounts to $14,000 for an existing home and $21,000 for a new home.

    Mark Jennings, director of real estate agent Ray White Macarthur in Sydney’s west, said sale inquiries had almost doubled to 700 a month.

    “The entry level for the market was $250,000; now it is as much as $270,000,” he said.

    One seller had put her three-bedroom house in the suburb of St Andrews on the market last November for $279,000, Mr Jennings said.

    The owner took the property off the market for several months then offered it again for $289,000. A few days ago, the property sold for $295,000.

    “There has been a definite pick-up in the last few months,” Mr Jennings said.

    Carol Taylor sold her three-bedroom home in the western Sydney suburb of St Helens to a first-home buyer.

    She put the property on the market for $290,000, hoping she would reap $280,000.

    “It was only on the market for 24 hours before it sold,” she said. She got the $290,000.

    Developers say the volume of lower-priced residential sales in NSW has caught up with more buoyant states such as Queensland and Victoria. Investa property group’s group executive of land sales, Lloyd Jenkins, said its lower-priced land and house and land packages accounted for 75per cent of sales, up from half of sales a year ago.

    At its two residental projects in Sydney’s west and northwest, first-home buyer sales had increased 100 per cent in the year to December 31.

    The story was similar in Melbourne’s western suburbs.

    The median price in the first-home buyer enclave of Caroline Springs was up 4 per cent to $324,500, a rise of $12,000 since October. Residex figures showed the median price in Broadmeadows was up 6 per cent and 4.5per cent in Niddrie.

    Surging prices at the lower end will flow through to the middle of the market, but slowly and in smaller percentage terms, said BIS Shrapnel senior economist Jason Anderson. The 400-basis-point fall in interest rates since September had had a bigger impact on the volume of sales and prices in the lower and middle markets, he said.

    While the proportion of first-home buyers taking out loans had jumped from a low 15 per cent to 26 per cent since the grant was increased, they were still a relatively small proportion of the market.

    BIS Shrapnel is forecasting housing prices to rise in all capitals by June next year: Sydney, Brisbane and Canberra up 2per cent; Adelaide and Hobart, 3 per cent; Melbourne and Darwin, 4 per cent; and Perth up 1 per cent.

    JPMorgan chief economist Stephen Walters believes the lower end of the market could deflate quickly.

    The investment bank forecasts interest rates will remain low or rise only marginally by the end of next year, putting the cash rate at 2.5 per cent at the end of 2010.

    However, JPMorgan expects a big jump in unemployment to 9-10 per cent by late next year.

    “That’s an extra 500,000 people losing their jobs,” Mr Walters said. “I think boosting the first-home market is policy that’s a bit shortsighted. Why pump money into a market where the buyers are particularly susceptible to losing their jobs?”

    Mr Walters is bearish on housing prices, forecasting they will fall by 10 per cent in the next year or so, mostly from the slowdown at the upper end.

  78. What all this is telling me is that I’d be a complete fool if I didn’t buy at least one other investment property within the next 12 months.

  79. John…strangle, strangle (huggy ones). There is no low end of the market until there is a reasonable stock of public housing..because there is no competition at the lowest end, especially now that rentals are unaffordable.

    To me we used to have: public housing and rental accomodation competing with low cost housing.

    But what is there as competition? Just building more and more hasn’t worked (maybe because developers keep building planning..but that’s another story) and so competition must come from public housing.

    We have that the FHBG has stimulated the economy which was needed. However, there is now the suggestion that it’s pushing the lowest affordable homes towards the unaffordable.

    Two points – that in spite of a very large amount of frantics in the public press suggesting that the FHBG was funding McMansions (over a long time), the facts suggest that this is not so. But that the FHBG was taken up by the lower end of the market.

    The other point is that the FHBG has to be means tested..for reasons, all obvious.

  80. John – please please please please do not have large cut/pastes of articles – some people use mobile devices (like me) to read the blog and having these large pastes slows the pages down. Please just select a paragraph or two and the link. Please.

  81. I’m extremely pleased with this initiative. Bravo, keep it coming I say.

    Stimulus package provides housing boost
    The federal government has announced $173 million funding to build new social housing in Victoria.

    Federal Housing Minister Jenny Macklin said the investment was part of phase one of the $6.4 billion social housing component of the government’s Nation Building and Economic Stimulus Plan. Some $692 million has been distributed nationally.

    “Working with the Victorian government, we have committed to deliver 667 new social housing dwellings across the state by July next year,” Ms Macklin said.

    “Not only does this mean new homes for families, it will also support jobs in the construction industry, including apprenticeships.”

  82. Apologies Joni, I have trouble containing my excitement sometimes (wink). Not a bad turnaround for a so-called pessimist. Lets see a balance come back into housing affordability. The government’s willingness to take up what the private sector are unable to do is absolutely F$%king brilliant.

  83. ..also Joni, I’ve been lobbying for this type of intervention for some time and I get a great deal of satisfaction when the obvious is addressed.

  84. Joni – “please please please please do not have large cut/pastes of articles – some people use mobile devices (like me) to read the blog and having these large pastes slows the pages down.”

    Yes Joni, the same applies to me.

    When using a mobile device, access and contribution is usually through “recent comments”.

    People that make successive posts clog up access to those of use that aren’t always sitting by our computer all day.

    Some of us enjoy contributing and following throughout the day via a mobile.

    The blog hogs spoil the ability to particupate.

  85. Miglo, on April 4th, 2009 at 12:51 pm Said:

    What all this is telling me is that I’d be a complete fool if I didn’t buy at least one other investment property within the next 12 months.

    People like you are the problem migs, not the solution. It’s pure greed, this is why we urgently need to do away with negative gearing as tax evasion.

  86. The blog hogs spoil the ability to particupate.

    You see, I’m not up on this mobile device stuff. How does it work? I’ve just always assumed that people would have access to PC’s.

  87. Actually John, it wasn’t you I was referring to. But I often use my mobile phone; it has a touch screen, with a hand writing recognition function.

    I hand write comments into a word document, then paste into this site.

    When doing this I usually have a look at the active recent threads, and participate in the discussion. If anyone is hogging all the commentary with photos of stuffed toys and irrelevant random words style input, participation is not easily accessible.

    Hence I’m entirely willing to press this type of hog to stop, but they seem entirely unwilling to consider this.

    Perhaps a thread on blog etiquette?

  88. I’d like to learn more because I am ignorant of the usage and restrictions from mobile devices Tom.

  89. Hence I’m entirely willing to press this type of hog to stop, but they seem entirely unwilling to consider this.

    Perhaps a thread on blog etiquette?

    Maybe if you had’ve asked nicely and explained your reason ie using a mobile phone to access the blog. Might have got better results than an aggressive and hostile stance.

  90. Or maybe someone else will volunteer to fill in the 11-5am shift?

    Go away…where would I get my music from otherwise!

  91. People like you are the problem migs, not the solution. It’s pure greed, this is why we urgently need to do away with negative gearing as tax evasion.

    Kitty, that’s bit low, and I fail to see how I’m the problem. The problems have been caused by low-doc and sub-prime loans. I have been the recipient of neither.

    I did what most sensible people do: I saved a deposit and I bought a house to live in. My wife received a paltry bit of super when she left the State Govt but it was enough to use as a deposit on another house. This house is rented out to a single, unemployed mother at $60 less than the market rate and we actually make a loss because of it. We didn’t buy that house out of greed, we bought it as some security for my wife when she retires in a few years.

    The equity in those properties increased quite substantially and we used that to buy the house we now live in.

    I don’t know if you’ve ever followed the stories I have posted but less than 10 years ago the wife and I had nothing. Absolutely nothing. I had just pulled though from a long and major illness that left me tinkering on bankruptcy, and Jedda and I wanted more in our lives than the poverty we had settled into, and we did something about it.

    Jedda supported me while I went to uni and our lives from that point have changed for the better. From nothing 10 years ago to owning 3 houses, being in the position to buy another, and having good incomes and the trappings they bring, in my opinion, doesn’t make me a problem. Quite the contrary, I’d like to think I could be an inspiration to others.

    Still, I’d rather be seen as a problem in your eyes than being destitute like I once was. I’ve been there Kitty, and there’s no way I want to go there again.

    I want to be able to fund my own retirement, or would you rather that I rely on a taxpayer funded pension?

  92. Yeah Miglo, we’ve had this exchange in the past, about you being a greedy slum lord and all.

    Sell up, you tax dodger.

  93. I want to be able to fund my own retirement, or would you rather that I rely on a taxpayer funded pension?

    Welcome, to the Pariahas(spell?), Migs…

    How dare you fund your own retirement…

    …we were foolish enough to pay for my bachelor degree up front and I graduated at the ridiculous age of 45…(just for my ego according to my father – but he still came to Adelaide for my graduation)

    …then I was silly enough to start my own business AND ask my wife to become a partner as Business Manager while I flew all over the world working…funny, we actually made money over the next 16 years…

    …BTW did I tell you The Minister and I got married with a daughter on the way, $300 in the bank, a $1600 debt and an income of $53 a week…then the Defence Force decided I was only worth $80 a fortnight for two years…

    BTW – no government handouts for you when you become a self funded retiree…yer on yer own smartarse..!

    …and welcome to to the Australia of envy…

    …the harder you work the luckier you get…you tall poppy you!

  94. You greedy old bastard TB. You could have quite happily survived on the age pension, eating baked beans and dog food, but no, you had to go and make something of your life. People like you just can’t help themselves.

    No wonder the world’s in a mess. And you’re the problem.

    Now go and give all your trappings to the needy and front up at your nearest Centrelink office on Monday and apply for the age pension. The world will be a better place if you were destitute.

    And don’t forget to tell your kids that your whole life has amounted to nothing.

  95. I want to be able to fund my own retirement, or would you rather that I rely on a taxpayer funded pension?

    But you’re not funding your own retirement migs, the taxpayer is. It is the negative gearing that I have a problem with, not you (I like you) I know that you are quite legally taking advantage of this reverse socialism form of tax evasion.

  96. Kittylitter, one house is actually positively geared, while the other will be positively geared if we increase the rent.

  97. PS – I like you too.

  98. And herein lies the danger of the first home owners grant:

    First-home rush keeps prices on boil
    AS FIRST-HOME buyers rush to take advantage of the increased Federal Government grant scheme, some agents are warning that people are paying too much for their properties.

    Robyn Harrison, of Laing and Simmons Annandale, said the surge of first-home buyers was driving up prices by tens of thousands of dollars, well beyond the savings offered by the grant.

    “We had three units in the same block, and two sold late last year for $409,000 and $415,000. But just last month a third unit there sold for $445,000,” she said.

    “They’ve inflated their own market. My advice to people is just to calm down.”

  99. The reason why I felt compelled to post this thread in the first place?

    Australia’s homeless crisis: 200,000 will face eviction,22049,25289997-5013110,00.html
    AUSTRALIA is facing a homeless crisis with more than 200,000 tenants in rented accommodation forecast to face eviction by next year – 80,000 in NSW alone.

    Research conducted for The Sunday Telegraph by Fujitsu Consulting shows that as many as 183,000 rental households across Australia could be in arrears by December, assuming unemployment rises to 7.5 per cent, with 68,000 in NSW.

    But if unemployment rises to nine per cent next year, as many economists predict, the number of tenants facing eviction rises to 216,000 nationally, and 79,000 in NSW.

    The actual figures may turn out to be significantly higher because research could only take into account those landlords with mortgages. It is not known how many more landlords there are who own their investment properties outright.

  100. I like Migs as well Kitty. Tall Poppy that he is LOL

    Actually, I’ve had previous discussions about his approach and after suffering a major financial set-back some years ago has worked hard to reverse his fortunes.

    He’s got a kind heart and, in my opinion, makes the type of landlord that I’d like if I were renting.

    Investing in housing is a legitimate way to invest but it simply gets out of whack when housing prices, debt levels and rental income requirements to service investor’s debt become unsustainable.

  101. Therefore John..if people have the option, then it’s much better to purchase as at least they’ll be covered by Rudd’s deal with the banks. This compares with renting – 2 weeks in arrears and you’re out on the street. Plus of course being evicted means that there is zilch chance of another RE agent taking you on as a client. Previous Rental History: Evicted due to moneys owing.

  102. Min

    Therefore John..if people have the option, then it’s much better to purchase as at least they’ll be covered by Rudd’s deal with the banks.

    Not always Min. The issue is affordability across the board is central. You don’t want renters jumping out of the frying pan and into the fire. Taking up the first homeowners grant and increasing private debt simply to avoid eviction. This could quite easily make matter increasingly worse across the board by pushing up housing prices and lead to even more people being unable to service their debt when interest rates increase has to be avoided at all costs.

    Private debt, it should be remembered, is what’s led to us being in such a vulnerable position as a nation.

  103. He’s got a kind heart and, in my opinion, makes the type of landlord that I’d like if I were renting.

    Me too, judging by the info you’ve given us migs, I know you’re one of the good guys.

    There’s way worse ‘wealth crazed pricks’ (a joke for reb) than you around!

  104. John, I am certain that you and I could argue this until the cows come home 🙂 I still maintain that rent money is dead money, 2 weeks in arrears and you’re out the door with little prospect of obtaining another property to rent (due to your ‘history’).

    From your link of 9.17am:

    The rise in unemployment will lead to a flood of claims to Centrelink for rent assistance, but the state benefits are often not enough to meet the rent payments in full, leaving landlords with little choice but to evict the occupants.

    Tenants are deemed to be in breach of contracts if they fall two weeks behind with rent. With many of Australia’s 1.9 million landlords needing the rent to cover mortgage payments, few give the tenants much extra time to pay arrears and tenants can find themselves on the streets within weeks.

    And re above:

    the state benefits are often not enough to meet the rent payments in full

    Choke, choke rental assistance, this is available mostly only to people on the Disability Pension. At last look this was $40pw, however this was a while ago.

  105. …and welcome to to the Australia of envy…

    Not envy TB, just pointing out that the ‘self-made’ get a lot of assistance from the taxpayer.

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