{"id":14111,"date":"2017-10-05T03:00:16","date_gmt":"2017-10-04T16:00:16","guid":{"rendered":"http:\/\/realestatetalk.com.au\/?p=14111"},"modified":"2017-10-05T03:00:16","modified_gmt":"2017-10-04T16:00:16","slug":"is-housing-really-that-unaffordable","status":"publish","type":"post","link":"https:\/\/channels.realty.com.au\/realtytalk\/is-housing-really-that-unaffordable\/","title":{"rendered":"Is housing really that unaffordable?"},"content":{"rendered":"

 
\n 
\nThe price of property in our two major capital cities has everyone talking about something called \u201chousing affordability\u201d.
\nBut before I weigh into this debate, it\u2019s important we understand the difference between housing affordability and affordable housing.
\nAccording to experts, housing affordability applies to those who live in \u2013 or aspire to live in \u2013 their own home.
\nAffordable housing, on the other hand, largely refers to public and community housing, as well as the affordable end of the private rental market.
\nOf course, the needs of people who just want an affordable roof over their heads are very different to people who believe that a beachfront unit in Bondi should be affordable to the majority of prospective property owners.<\/p>\n

Property price reality<\/h3>\n

There seems to be a mindset that all property investors are bad and are stopping\u00a0first homebuyers getting in the market<\/a>.
\nIndeed, it appears, they are trying to regulate a market so that it remains \u201caffordable\u201d for everyone but that is a pipe-dream because our population growth means it might never be affordable again.
\nJust talk to someone in New York or in London about first homebuyers.
\nOf course, there aren\u2019t many \u2013 apart from the super wealthy.
\nThat\u2019s because there is a limited supply and a huge demand for properties in these mega-cities, which means that prices are high and always will be that way.
\nSo the problem with the housing affordability argument is that housing affordability is actually not the problem.
\nStay with me here\u2026
\nBecause of historically low interests, mortgage repayments remain affordable for the vast majority of borrowers.
\nThe main issue for would-be property buyers then is saving a deposit to get the loan in the first place when the market has been at its peak and prices have been rising faster than they can save.
\nSo the problem is not really about affordability but rather deposit saving.<\/p>\n

A question of perception<\/h3>\n

A case in point is the recent\u00a0CoreLogic Perceptions of Housing Affordability Report<\/a>, based on Galaxy Research, which identified that the majority of Australians thought housing affordability was worsening.
\nThe report revealed that some 62 per cent of Australians thought housing affordability was worse now than it was a year ago, and 58 per cent believed next year will be even worse with nearly nine out of 10 non property owners concerned about their ability to afford a home.
\nThe greatest impediments to housing affordability were perceived as having the deposit, stamp duty, and, interestingly, the impact of foreign buyers. And nationally, to make housing more affordable, Australians would like governments to reduce or remove stamp duty (73 per cent), grant concessions to first home buyers (71 per cent) and create more jobs in areas with lower prices (65 per cent).
\nWhat these results show us is that axing negative gearing or Capital Gains Tax provisions didn\u2019t feature highly in the housing affordability argument.<\/p>\n

Affordable locations everywhere<\/h3>\n

Sydney and Melbourne are at the forefront of the debate but, guess what, they\u2019re also some of the most desirable cities in the world to live.
\nSomething else that no one seems to want to talk about is that property prices in these two cities did very little for years prior to about 2013.
\nWith million-dollar plus price tags common in both cities, many prospective buyers will struggle to invest in the most exclusive suburbs. Those locations were probably never \u201caffordable\u201d before anyway.
\nHowever, if you go into places like Melbourne\u2019s west or into Greater Brisbane, you\u2019ve still got\u00a0affordable housing<\/a>\u00a0for $300,000 or $400,000.
\nThe thing is you can still buy property in seven of our eight capital cities for affordable prices.
\nIt\u2019s just that too many people seem to want a champagne property when they\u2019ve really only got a beer budget.
\nDisclaimer:<\/strong><\/em>
\nThe information provided in this article is general in nature and does not constitute personal financial advice. The information has been prepared without taking into account your personal objectives, financial situation or needs. Before acting on any information you should consider the appropriateness of the information with regard to your objectives, financial situation and needs.<\/em>
\nThis article was originally published on Intuitive Finance.<\/em><\/p>\n","protected":false},"excerpt":{"rendered":"

    The price of property in our two major capital cities has everyone talking about something called \u201chousing affordability\u201d. But before I weigh into this debate, it\u2019s important we understand the difference between housing affordability and affordable housing. 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