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Late thunder min 17° - max 26° Young homebuyers 'expect too much'
12:00a.m. 29th February 2008
While rentals will inevitably become harder to find in the future, it need not be doom and gloom for potential first homebuyers.
Jean Hamer, chair of the Real Estate Institute of Queensland Sunshine Coast branch, believes home ownership is achievable for most people.
“A lot of younger people are expecting too much. They’re looking to buy all their toys, cars, TVs and the rest, before they buy a house,” she said.
“They’ve got to think smaller. Instead of wanting to get a big house with a pool, they should look at areas further out.
“They can get a unit near the beach for $200,000 to $300,000 or a house at Nambour or Pomona for around $300,000.”
Ms Hamer said younger generations found it harder to accept they would need to make sacrifices to own a home.
“A lot of us have lost track of what should come first – is it a roof over your head or is it the other things?”
In July 2007, then opposition leader Kevin Rudd promised to invest $500 million in a Housing Affordability Fund to save new home buyers up to $20,000.
Under Labor’s plan, local governments would apply through a competitive process to receive grants to cover some of the cost of new housing infrastructure, lowering the outlay for new home buyers.
However, in the lead up to the Australia 2020 Summit in April, housing affordability has not been listed as one of the 10 critical issues on the Labor Government’s agenda.
Meanwhile, Sunshine Coast Regional Council transitional committee chair Don Aldous is confident as a new bipartisan Committee for the Sunshine Coast currently in the throes of being formed will produce an innovative plan to address housing affordability.
“The committee can be a part of (the solution). It’s going to have to be an agreement with the private sector to have affordable housing.
“Affordable housing isn’t something that local government provides. It’s going to have to be a partnership with business, investors, state government and local government.”
Mr Aldous says we have to think outside the square.
“What is affordable housing? Say you build an affordable house for young people at $300,000, then they sell the house, they sell it for what it’s worth so it’s only affordable once and it’s gone.”
One example Mr Aldous likes to give is building small houses with potential to be upgraded to large family homes.
“The first home can be a two bedroom house, with one shower, one toilet and one carport, but on that block of land they leave a wall at the back with plans approved to add on another two or three more bedrooms in five or 10 years time when they want to expand the house.
“Then they’ve got equity in their own home that they’ve already bought to have three more rooms.”
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Recent Comments
for his plan of building small now and increasing in the future - the home owner needs land and the tiny blocks of land being put up for sale at the moment aren't big enough to allow expansion later on.
I had a mate who bought a house and moved in with a blow-up bed and a one-ring primus stove - nothing else!
I genuinely wish all you youngsters the best of luck in your endeavours.
Of course the limited or atrificially limited, supply creates increased demand and therefore increased pricing as well so both sides of the battle need to be addressed. So it's a combination of both factors IMHO.
Maybe the government needs to be the developer as well, sort of like the RBA setting the cost of cash, the State or Federal govt could control land releases and therefore ensure prices are not out of control?
Now every other person on the street has an investment property and this has quickly created a pricing bubble.
To return to the trend line, prices will have to stagnate for quite a while or values will actually have to come down or both.
Keep in mind that Real-Estate commission, Council fees and state Gov stamp duty would have risen proportionally in the same short time. Hard to justify when the services being provided are essentially the same or reduced in some areas.
Add to the burden the increased bank fees and inflation on building materials then slap GST on the whole lot.
Oh …and Hex fees. Too bad if you want to start a family as well.
Sheesh! Wonder why affordability is an issue?
Here's my suggestion,
The no nett change budgeting policy.
Council annually and incrementally increases fees on anything that is not owner occupied whilst reducing the same saved amount on principal places of residency.
State Government does the same thing with Stamp duty with no nett loss.
Federal Government scraps first home buyers and puts the money into low cost public housing for those with their backs to the wall. At the moment all of the Prime Minister’s children would be entitled to the non-means tested rebate.
Federal Government annually and incrementally increase Capital Gains Tax on investment dwellings, whilst ratcheting down on tax write offs associated with dwellings.
In combination these measures would take the hot air out of the housing market, over time
The enactment of some meaningful legislation capping fees on residential loans for principal place of residency.
Review of the Real estate commissions, these people are making a motza for providing the same old service and they're still insisting that we pay to advertise what they've been commissioned to sell in the first place!
As for the younger folk and their spending habits....wake up and smell the roses...they all have a budget choice and accordingly you can choose to live the high life or go live out in the sticks.
Alternatively we could carry on business as usual and our kids can own their home at 55, pay off the car at 60 and clean ot their hex bill at 65 and hope that they can afford the shool fees and health in the interim. Don't mention the plasma !
Even though I agree with much of your comment your idea "Council annually and incrementally increases fees on anything that is not owner occupied whilst reducing the same saved amount on principal places of residency" sounds good but the only problem I see with that is that it will probably increase rents of those people who are desperately trying to save a deposit for their own home.
I am one of these young 'expecting too much' kids. I have grown up on the coast and can't afford to buy. I do not have a jet ski, I own a 20 year old car and a second hand TV which is about the same age. I do not go out and party but we do have 1 child.
Consider this.
We bring home about $800 a week (I work partime - mum the other part and my partner works full time.
Rent $270 (average rent on the coast is $300/week)
Food & Household - $170
Fuel/Transport - $60
School expenses - $50
Bills - $150
Leaves us $100 a week or $5200 a year - it will take us about 6 years to save the normal 10% deposit for a $300000 house and that's if nothing goes wrong eg - car break down, or any other unexpected expense and if in 5 years time the houses stay at the same prices as they are now (I won't hold my breath)
I know people will say I could work full time but I believe that being with my child is important and yes if I had a choice between raising my child and owning a home I would choose my child. It is just unfortunate that to be able to do both we will have to leave the Sunshine Coast where I always thought my children would grow up like I did.
If Council were to do this in an incremented, staged, manner, in conjunction with the Federal and State Government, then low cost government rental housing would be available to you whilst the heat would be taken incrementally, out of the market, over time.
There is an answer, but like global warming it needs to be a responsible concerted and multipronged approach. I don't see any other way.
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