Housing cost in today's world

OnFire

I was on a local FB private rental page, and someone started a discussion asking if anyone’s rent has gone up recently.

I was quite shocked at some of the replies. A friend of mine posted their rent is going up $65 a week! They are a single mum on a low income.

Someone else’s rent is going up $110 per week - though that then brings it to 330 a week, which is on the cheap side of what’s out there.

It seemed like not long ago, housing in my city was quite affordable, and you can live and afford food and housing if on a low income. It was nothing like Melbourne or Sydney. I am just astounded at the cost of buying a house, and at the cost of renting.

How are people on low incomes meant to survive these days?

CassandraNORI

Rents around where I am (Perth) have gone up by around $100 per week, I don’t know how people survive.

CallMeAl

Something’s gotta give. But then I keep saying that, and nothing gives, and it keeps going up. I don’t understand it.

MizHops

Yep, house prices and rentals are insane around us. Our house has doubled in value in 6 years. Average price is around $600 a week and I’m a couple hours south of Sydney. I have no idea how people afford it either. There are hundreds of people at each open home, with so many local people facing homelessness as rentals are so hard to come by. So many people from out of area buying and choosing air bnb as a more financially rewarding investment down here. It’s shit.

RichardParker

It’s just the rich getting richer.

squeekums

We bought in dec last year, right now, houses in same area, a street away, same specs are selling for 50g more than what we paid. We wouldnt have been able to afford what we got with the market how it is right now

OnFire

squeekums

A house in my neighbourhood recently sold for about $200,000 more than it would have cost to build a couple of years ago.

Prices are insane and houses are selling so quickly. So many people are unable to find rentals as there aren’t many options, and rent is so expensive. On my local fb goup I see people posting who are homeless, living at local camping grounds. It’s a new face of homelessness that shouldn’t exist.

Sabrina

You are spot on about multi generations not owning a home. It’s the poor getting poorer.

Sabrina

Looking at it in a big picture way, we also have a problem down the track which is never mentioned by the government when it’s trying to pretend the housing problem doesn’t exist, which is the fact is we haven’t set up our social support systems to take into account having larger and larger amounts of people retiring without their own homes. It’s not something that’s applied in super calculations. Neither is the fact we have more and more people now working in contract and casual roles retiring with less super.

i would say at some point the pension system in Australia will look a lot different than it does now. I know personally, when I plan for retirement, I’m quite careful not to factor government pensions into any calculations. I think it will be a very different two tiered system than the one we have now. The government relies heavily on the bank of mum and dad as a solution for housing problems for now but when mum and dad couldn’t buy property either that stops being an option as well. I’m not sure what the solution is but it’s pretty frightening TBH.

SatansWoman

Appreciating property prices have been sold to us sheep as a good thing “hey! You’re house doubled in value in 2 years, OMG you’re RICH!!!” um … yer you’re not ….. unless you can convert that property to cash and use that cash to buy something other than another property, it actually means nothing. And if that we’re the case, you probably should buy another property (or deposit on 2 and let the rent pay for itself) and this is how property and wealth hoarding starts and happens.

It is not a good societal thing! What about those who do not own? Not everyone has a household income of greater then 200K. What about their and our kids? Do we really want our suburbs filled with lawyers and finance people? Just an inelegant smattering of thoughts here, but you get the gist of it

squeekums

SatansWoman

Not everyone who owns thinks they rich.

Owning hasnt made us rich, but owning sure as hell will cut down our expenses (no mortgage on house) it also gives us something to borrow against if we need, means we cant be kicked out at drop of a hat. It makes us secure which is frankly all we care about. It gives dd a great leg up after we die, she can sell the place at a profit to what we paid or live in a nice house owing nothing but electricity and rates. For us thats more important than cash in hand/bank, cash can always be found, secure housing, not so much.

Our income is nowhere near 200k, i work part time retail, DH is medically retired

If we had the cash, id buy a business over a rental, no way would i want to deal with the crap the in laws did with tenants, i wouldnt even do airbnb

Sabrina

People not having children or delaying children is another factor that is going to make a big difference later on. People get excited when they think less people means less pressure on resources, which is true, but wealthy countries factor in a certain number of tax payers into their long term planning as bringing in $$ to support infrastructure and social services.

Counties like China and Japan are now facing the prospect of a rapidly ageing population and not enough tax payers to support the social services that they’ll need. There’s immigration of course but then they’ll still need housing, which they might not be able to afford, and support when they retire as well. Round and round it goes.

SatansWoman

squeekums

Owning a house doesn’t make you rich and this is broadly true but would you still say the same if the said house is worth 2.5 mil? This figure isn’t unusual for a home with no yard where I grew up and live*. Home ownership and ensuing stability of abode where your main costs are utilities and food is not within reach of just about anyone in a capital city unless you have serious capital …… to start with.

Most Australians live in major metropolitan areas and housing affordability and security (also known as a ponzi scheme) is a real real problem.

* a generation ago my LGA was very working class with one of the worst crime rates in the country

MizHops

squeekums

I know I’ve missed a lot as I stopped reading old eb much and haven’t even kept up here despite my best intentions but I had no idea about your DH. Is he okay? I’m glad there’s been some positive in what sounds like it must have been a trying time for you all!

MrsT

Our house has increased in value by over $100k. We only bought it a year ago and we wouldn’t be able to afford it now.

It’s crazy.

RichardParker

It’s inflation masquerading as wealth. It will bite us all in ten years when interest rates go up and people have to sell. There’s been no productivity growth in this country for decades. Best thing we’ll be able to do it sell up and move overseas.

SatansWoman

Annsy

I have some bleak news … based upon what I know having worked in finance at the start of my working life (this job helped me get a deposit in inner west sydney, oh the irony) the bank did their sums and that scenario isn’t very likely to happen. Fixed loans are a way for you, the borrower, to fix your repayments and the bank (the lender) to fix their income so the bank is, in effect, providing you a “product”. Thing is, in the background they’ve done all the modelling and calculated all the probables of various scenarios and only offer “products” that’s gonna make them money overall. Banks are there to make a profit and are the opposite of nice (as we the person on the street defines it)

RichardParker

SatansWoman

It does make you rich, comparatively, because you own an asset that you can liquidate if you need to. And it’s going to appreciate in value and become and inheritance for your kids. But it doesn’t really give you any more mobility or quality of life if the same house is worth $1mil or$ 3 mil (don’t know what the font is doing there). It doesn’t make the house itself any nicer, or the people in it more interesting. And I’d argue that a nation obsessed with making money out of property is actually a pretty vacuous nation, at the expense of people who get further away from owning anything.

Gum-boots

We’ve managed to lock in 1.8% for four years. I like the certainty of it. We are allowed to pay off a bit extra every 12 months ($15k) without triggering a break fee.

But yes, I can’t imagine trying to enter the Sydney market now, and I worry for our kids.

SeaStar

I just looked up our house. Its estimated value is $200,000 more than we paid 5 years ago. DH had wanted us to wait (this is our first home) because he was sure the market would crash and we could pay less, but I’m so glad I insisted we didn’t wait. We’d either have a lot more debt or would have had to move further out from the city if we’d waited.

My parents bought their house 25 years ago for $120,000, on one low income. They were able to pay it off after about 15 years thanks to an inheritance. It’s now valued at$ 450,000 and they will probably downsize soon, but as they want to move closer to us, they’ll be spending that much, if not more, just to get a unit or maybe a townhouse.

I’m just hoping that things will have settled by the time my kids have grown up, but who knows? My parents would never have guessed that I would have spent as much as we did on a house.

cardamom

Same here @SeaStar - DP was in less of a rush to buy and wasn’t 100% sold on this place (until MIL got in his ear - thanks MIL!) but I’m sooo glad we did. We bought in August 2019; our neighbours (block of units, so comparable properties) bought their place at the same time and sold a few months ago. In that time the price increased by $175k - 25% more than what they paid for it, in less than two years, for a very basic/modest, un-stylish orange brick unit. So very thankful that we bought this place when we did, otherwise we’d never have been able to get in now.