{"id":11559,"date":"2017-05-09T03:00:34","date_gmt":"2017-05-08T17:00:34","guid":{"rendered":"http:\/\/realestatetalk.com.au\/?p=11559"},"modified":"2017-05-09T03:00:34","modified_gmt":"2017-05-08T17:00:34","slug":"stop-playing-at-making-property-affordable-michael-yardney","status":"publish","type":"post","link":"https:\/\/channels.realty.com.au\/realtytalk\/stop-playing-at-making-property-affordable-michael-yardney\/","title":{"rendered":"Stop playing at making property affordable \u2013 Michael Yardney"},"content":{"rendered":"

Is what the Federal Government attempting to do about making housing more affordable just tinkering around the edges?\u00a0 Is there something that can be done or is it just a reality that some people will never be able to afford to buy a property?\u00a0 Our discussion this week with Michael Yardney<\/strong> <\/a>centers around that point.
\nTranscript:<\/strong>
\nKevin:\u00a0\u00a0<\/b>There\u2019s a lot of talk about how we can make housing more affordable in Australia, and with it, comes a lot of tinkering around the edges. And we wonder \u2013 well, I wonder anyway \u2013 just how helpful that really is going to be in achieving what everyone wants to try to achieve, and that is making housing more affordable.
\nBut is it going to be possible? And what will be the likely impacts of that? Michael Yardney joins me to talk about that from Metropole Property Strategists.
\nHi, Michael.
\nMichael:\u00a0\u00a0<\/b>Hello, Kevin.
\nKevin:\u00a0\u00a0<\/b>This is a conversation you and I have had on many occasions, and no doubt, you\u2019ve had it with other people as well. What\u2019s your view on this, Michael, this tinkering around the edges? Are we going to be able to make housing more affordable?
\nMichael:\u00a0\u00a0<\/b>Well, first of all, let me explain my position. I have in my blended family, six kids and nine grandkids and one on the way. So, I\u2019m definitely aware of the challenges that young people have, and I have a number of generations below me that I want to be able to live in good housing, in a fantastic country, in big capital cities.
\nBut having said that, I think we have to change our expectations, Kevin, because if you lived in London, if you lived in Paris, if you lived in New York, you wouldn\u2019t really expect your children to be able to buy a house as their first house, and even you wouldn\u2019t necessarily be able to expect them to buy an apartment first off either, Kevin.
\nKevin:\u00a0\u00a0<\/b>So, what are you saying? That it has become unaffordable for first-home buyers?
\nMichael:\u00a0\u00a0<\/b>If you talk about our big capital cities of Melbourne and Sydney \u2013 which are international cities, coming up to five million people in them, situated on a harbor, commerce hubs, employment hubs \u2013 it is getting more and more unaffordable, and it\u2019s likely that there will be generations of people who will never be able to own a home and who will be renters.
\nMany of the things that the government are doing are exactly what you said a moment ago, Kevin \u2013 tinkering around the edges \u2013 but in general, every time the government or Treasury gets involved, it actually has the wrong effect; it pushes houses up.
\nKevin:\u00a0\u00a0<\/b>What about the first-home owner\u2019s grant? What does that actually achieve?
\nMichael:\u00a0\u00a0<\/b>Kevin,\u00a0<\/b>in the beginning of July this year, Victoria has new first-home owner\u2019s grants and getting rid of stamp duty. And what it\u2019s doing is that currently, first-home owners are not buying. They\u2019re holding off because all of a sudden, they\u2019re going to be given an extra $10,000. And similarly, I know a number of sellers who have decided, \u201cI\u2019m not going to sell, because I know property values are going to shoot up in July.\u201d
\nThe problem is we have to look at the past, and politicians have forgotten to do that. In 2010\u20132011 when the first-home owner grants were given in New South Wales and there were stamp duties abolished, what it did was it gave first-home owners an extra $10,000, $15,000, $20,000.
\nWhat they were able to do was use that for leverage when they went to the banks, because they had more deposit because they didn\u2019t have to put it aside for stamp duty, and they had another $70,000 or $80,000, which they paid for houses. And in general, first-home owners want to live where the action is, so they buy established properties. Somebody has to sell those, and those owners upgraded.
\nSo, the first-home owner grant became a second homeowner or established homeowner boost, and what it did was give a fantastic boost to the established property market in the inner and middle ring suburbs, and I predict the same is going to happen in Victoria this year.
\nIt\u2019s not going to make properties more affordable; it\u2019s going to keep this good, strong property market in Victoria even stronger.
\nKevin:\u00a0\u00a0<\/b>Just a comment on negative gearing for a moment. I would say it\u2019s probably one of the most unpopular taxes, but we really do rely heavily on private investors, and without it, you\u2019d have to say that private investors probably wouldn\u2019t be as attracted to the market and therefore rent would likely go up. And that\u2019s certainly not going to achieve the outcome anyone wants, Michael.
\nMichael:\u00a0\u00a0<\/b>The outcome people are wanting is more affordable housing, but when 70% of Australians own their own home or are paying it off, the only way to make your and my house affordable to other people is to decrease the value of your and my house, Kevin \u2013 and nobody likes that or wants that.
\nSo how do you make housing more affordable without decreasing the value of that $6.9 trillion worth of residential real estate in Australia? One way people say is get rid of the ugly, greedy investors who are pushing up the prices because of negative gearing. That\u2019s fiddling at the edges, and as you say, we still have to provide rental accommodation for a third of our population.
\nThe other thing is they say, \u201cLet\u2019s get more supply. Let\u2019s go to regional Australia. Let\u2019s have fast trains. Let\u2019s have more employment out in the regional areas.\u201d But that\u2019s not where first-home owners want to live. In general, they want to live close to all the amenities, close to all the action, and close to where their friends are. And we\u2019re not building enough of the right sort of properties for them, Kevin.
\nKevin:\u00a0\u00a0<\/b>So bottom line, Michael, what do you think is the answer? What do you think is likely going to be the outcome?
\nMichael:\u00a0\u00a0<\/b>It\u2019s a clich\u00e9, but it\u2019s a First-World problem. It\u2019s one of the prices you pay for living in the best cities in the world. Melbourne for six years in a row has been voted the most livable city in the world. Sydney and Perth and Brisbane have been high up on those lists as well.
\nIt\u2019s one of the costs that comes with the pleasure and enjoyment and comfort and safety of living in Australia, Kevin.
\nKevin:\u00a0\u00a0<\/b>So, your advice to young people?
\nMichael:\u00a0\u00a0<\/b>Save, consider rent-vesting, consider borrowing from the bank of mom and dad. Don\u2019t give up. Maybe you should just lower your expectations of what your first home could look like.
\nKevin:\u00a0\u00a0<\/b>Yes, I think that\u2019s probably the message, isn\u2019t it \u2013 lower those expectations and do whatever you have to do to get into the market.
\nMichael:\u00a0\u00a0<\/b>You have to get in the market because if you don\u2019t, it\u2019s going to run away from you. You\u2019re right, Kevin. Thanks.
\nKevin:\u00a0\u00a0<\/b>Absolutely. Great talking to you, Michael Yardney. Thank you so much for your time.
\nMichael:\u00a0\u00a0<\/b>My pleasure.<\/p>\n","protected":false},"excerpt":{"rendered":"

Is what the Federal Government attempting to do about making housing more affordable just tinkering around the edges?\u00a0 Is there something that can be done or is it just a reality that some people will never be able to afford to buy a property?\u00a0 Our…<\/p>\n","protected":false},"author":176692471,"featured_media":11564,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[32,34,10,11,13,36,22,25],"tags":[101],"class_list":["post-11559","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-buying-a-property-topic","category-finance-topic","category-kevin-turner-sponsored-channels","category-kevin-update","category-latest-story","category-property-investment-topic","category-research-topic","category-sponsored-channels","tag-podcast"],"yoast_head":"\nStop playing at making property affordable \u2013 Michael Yardney - 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