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Housing affordability: Investors ‘striving to turn shelter into luxury item’

 

OPINION

 

There’s been an awful lot of noise lately about Australia’s housing market.

 

Opinion pieces, market analyses, discussion panels; anywhere you care to look you’ll see people throwing around terms like “housing bubble” and “unsustainable” in regard to Australia’s rapidly rising house prices. It’s fair to say that in some parts of Australia those terms are appropriate.

 

The median house price in Sydney has surpassed $930,000 and is still climbing. If that doesn’t seem ridiculous enough, a 12sq m car park in Kirribilli sold for $120,000 earlier in June.

 

Once more for those at the back: a dirty square of cement sold for a sum that could easily buy you a boat, a caravan, or a second-hand Aston Martin if you were so inclined.

 

The point is that a lot of disadvantaged people could do a lot of things with $120,000, and the fact that some well-off homeowner spent it on 12sq m of nothing leaves a bad taste.

 

But what leaves a worse taste is the fact that, by and large, investors don’t see the housing bubble as a problem. They welcome it with open arms, offering to take its jacket at the door, asking if perhaps Mr H Bubble would fancy a glass of champagne or a cigar.

 

Anthropomorphised financial phenomena aside, remember that our Prime Minister Tony Abbott all but acted as a mouthpiece for wealthy investors when he said recently that he hopes our already sky-high house prices are increasing.

 

This tellingly managed to completely disregard the compounding struggle faced by potential homeowners, who’ve had affordable property snatched from under their noses by investors.

 

A balanced market should surely be comprised of 70 per cent owner-occupiers and 30 per cent investors. That’s the historical norm.

 

But as of March, investors represented more than 50 per cent of all new lending in NSW’s housing market, and some of the other states are following suit.

 

If the bubble doesn’t burst soon, this paints a worrying picture of a future where investors are a vast majority of the housing market and new entrants are forced into renting for a majority of their life.

 

For as long as I can remember, there’s been a general expectation that the goalposts for home ownership fall either side of 30, but the way house prices are going I might be 50 by the time I’ve saved my 20 per cent deposit.

 

And what about the more financially disadvantaged people my age? I’m lucky to be from a relatively upper-middle class socio-economic background and I’m extremely concerned about my future in regards to housing. So, how must they feel?

 

As a gainfully employed student in the early years of my study, it’s hard to know whether to be worried or not. This is an issue that won’t affect me directly for some time, but I can’t help but fear that this bubble won’t have burst by the time I set my sights on property ownership.

 

It’s a uniquely frustrating situation to be part of a generation typecast as lazy, selfish and naive while bigwigs from the generations that came before us (who typecast us as above) ruin our chances of owning homes on a healthy planet.

 

At the end of the day, I’m generally not in the habit of begrudging someone their ability to make more money, but my generosity doesn’t extend to an informal conglomerate of hundreds of thousands who are striving to turn the basic human need for shelter into a luxury item.

 

The word “investor” isn’t a dirty one, but a housing market dominated by investors is one that will see the majority of my generation become disadvantaged lifelong renters at best, and unable to afford housing at worst.

 
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