Housing Affordability nonsense - it's not at all what you're thinking
If you scroll straight past this without even reading it then you are being ignorant and NOT understanding or addressing the so-called issue at all.
As much as I loathe Scott Morrison and do not support him in any way, shape or form, earlier this week he made a valid statement that has been entirely misquoted and misrepresented by the media (is this any real surprise?), and now the country screams that he is "out of touch with reality".
Here's the real kicker - he isn't actually wrong!
It is alleged that he said “If you can’t afford rent then buy a house” but that’s not at all what was said. What he said was “The best way to support people renting a house is to help them buy a house” with ‘help’ being the operative word.
Facts and numbers don’t lie, and you’ll easily see below that it is indeed possible for more than enough people to afford and buy a home, but the difference is what people want versus the choices of where this might be.
Below is a map showing the density of the population in Australia.
Notice how everyone lives on the coastal outskirts. There is an abundance and more than enough land in Australia to develop and build housing – but people don’t want to live there.
Everyone wants a waterfront mansion in Point Piper but can they afford it? No! And to say “yeah but you can’t live in the desert”. Really? Take a look at Dubai, Las Vegas, Arizona, there are literally thousands of locations all across the world built in the middle of a desert proving it can be done, but people are choosing not to live there and before anyone says “but there’s nothing there” fails to understand that any form of development anywhere increases jobs for the planners, the builders, the transportation of material, the food required to feed all these people, the places for them to go to after a hard day’s work etc. which all compounds into a living organism and society.
I personally have many tenants on very high incomes that could easily afford the repayments on a home loan, they simply don’t want to and prefer renting as I have asked them if they’d like for me to show them how it can be done. Some people simply don’t want to own a home, to have the freedom to move wherever and whenever they like regularly or may just be very low risk averse, being disinclined or reluctant to take any form of risk which undoubtedly secures any real chances of financial future or freedom.
You want to know the difference between the have's and the have not's? Anyone with an attention span longer than that of a toddler will know and understand that the key difference between the rich and poor only comes down to 4 simple and very doable things.
Observe. Listen. Learn & Take Action
I cringe every single time anyone says that there is a housing affordability problem in Australia because it's simply not true!
To say so is as ridiculous as saying there is a Bentley, Ferrari and Lamborghini affordability issue in Australia
Does everyone want one of these? Yes! Does everyone drive one of these? No! It's expensive yet tons of people do own and drive these types of cars, however there are literally millions of other options and types of cars out there that "normal" people are driving every single day and the exact same thing goes for housing.
Approximately 500,000 dwellings are bought and sold on average every single year. It's certainly not unaffordable for half a million people to do this and that's taking into account that not everyone is even interested at looking to buy or sell a property
For those that say they can’t do it, let’s look at the numbers and work out where their excuses are coming from.
Property is literally transacting daily - the exact opposite of being "unaffordable"
The average repayment on a $750k house or apartment is around $2,800/m. Divided by 4 for weekly repayments this works out to roughly $700/w. Now the average rent in Sydney for a house is around $600/w or $500/w for an apartment. Outside the capital city the rents are much less all around, but again everyone wants to be in the capital city or a certain suburb forgetting that it is supply and demand that determines the prices of housing be it buy or rent.
Most of NSW isn’t Sydney – are you now starting to see the bigger picture?
As a Buyers Agent over 90% of our clients have been struggling as they are unrealistic about their expectations from the outset. I and many others have clients stating they want a certain type of property in a certain suburb or even a certain street and that’s it, their mind is made up and will say they have had trouble finding what they want (everyone’s eyes are always larger than their pockets no matter their budget) so managing expectations for them to understand what they actually can afford and being realistic about it is why so many have struggled for so long. They can quite easily afford a multitude of properties but want the ones they can’t afford and then say “no” to properties presented to them that actually tick their requirements because it has the wrong kitchen, the wrong layout or is on the wrong street, missing out as the market continues to move.
Take the Eastern Suburbs for example. The $700/w they pay in rent every week for a 1-2 bedroom apartment in Bondi can easily afford them a 4 bedroom house on 500 square meters of land in an outer suburb – but they don’t want that or to be there
We can build cities and suburbs literally all across Australia but we don’t. Look at the U.S. with roughly the same land size and a population of over 350 million people. The entire country is being utilised and they still have plenty of uninhabited national parks, deserts, mountains etc.
In Australia we have so much land and a population of only around 25 million people, BUT, everyone wants to be on the coast and then whinge they “can’t afford a house”.
Yes you CAN, but where will that be?
It always has been and always will be about demand, and the demand is determining the prices so they should stick with what they actually can afford and not sit there and say that there is an "affordability issue", because there are on average 10,000 people buying these properties every single week which is NOT the definition of anything being “unaffordable”.
Let’s not forget that we are living in the “NOW” generation where people in their 20’s and 30’s are all crying that they can’t “afford” what they want when it took their parents 40 or 50 years to finally get their dream car or live in their dream house in their dream suburb.
It’s NOT unaffordable, YOU just can’t afford it and refuse to lower your expectations on WHAT you CAN afford and WHERE that may be.
That is not an affordability issue.
We need to start seeing the forest from the trees and being realistic about the situation. We won't always get what we want - when we want it and this is the problem. Once this realisation has been addressed then the problem will somehow magically disappear. There is so much land out there for someone currently paying $700/w in rent to buy a huge plot of land for under $100k and then building their dream home exactly as they want it for under $500k, where the home loan repayments will work out being MUCH less than the rent they are paying in the first place - it's just not going to be where they want.
The question is will they do it?
If searching for property whether it be for a new home or investment has dragged on or is becoming frustrating and tiresome, please contact me for a short no-cost consultation. I specialise in the Eastern Suburbs of Sydney and can help alleviate the stress, wasted time and confusion of purchasing real estate. If your search has already taken you any longer than 8 weeks - it would be wise to inquire about engaging professional help for advice and discuss any questions you may have.
Simon Tasievski | 0403 625 566
Licenced Buyers Agent, L.R.E.A & Managing Director | Haus Property Buyers
simon@hauspb.com.au
#hauspropertybuyers #hauspb #realestate #buyersagent #buyersagents #easternsuburbs #property #buysell #realestate