Tell 'em they're dreamin.
March 11, 2016 9:18 PM   Subscribe

 
This is a serious problem, and capital gains tax / negative gearing policies, along with lack of new land releases and poor public transport planning, making dwelling on the urban fringe unattractive, have exacerbated this.

I can't help but feel that, to some extent, our largest cities have simply reached carrying capacity. I would love to see a drive towards regional development in regional centres. Fuck Sydney and Melbourne. I get a little weary of inner-suburban Sydney people complaining they can't buy a house, when their criteria for where that house must be situated includes "must be within walking distance from my current favourite pub". They will accept no less than their kids attending the same primary school they did as kids. We need more jobs outside the major cities so people can live there in accessibly priced property.

Quite frankly, pork- barreling in the US has contributed to the establish of livable medium-sized towns across the US, each with their own university or factory or government office providing employment. We don't have nearly enough of that. Everything seems incredibly concentrated towards inner-Melbourne and Sydney.

The other side of this that's rarely discussed is how awful renting in Australia is. If nothing is being done to fix the housing market, something should at least be done to make long-term renting tolerable.
posted by Jimbob at 9:38 PM on March 11, 2016 [10 favorites]


. I get a little weary of inner-suburban Sydney people complaining they can't buy a house, when their criteria for where that house must be situated includes "must be within walking distance from my current favourite pub"

I think this is a little unfair, a more qualified answer would be "within ninety minutes of the cbd, where my job is." I mean, houses in Campbelltown are going for a million bucks, that is a long way away from anywhere.

That all said, you can still buy houses affordably in the outer suburbs of Sydney, but they are total shit boxes and miles away from anywhere.

Cgt and negative gearing have so much to answer for, and most politicians want to dodge both of them.

That said, we can talk about the sustainability of the Australian dream and its desirability. We still have one of the highest home ownership rates on the world, though it's dropping fast, and one of the lowest for mortgage defaults.

I'm hoping this is sorted out by time my kids are looking to buy
posted by smoke at 9:58 PM on March 11, 2016 [5 favorites]


It may be a bit exaggerated, but I have honestly seen the sentiment expressed that people don't want their kids to grow up in the outer-suburbs because "it's a hole" and "there's no culture there" and "it's full of bogans". As an outer-suburban guy pretty much all of my life I'd argue with that assessment, but I'd also suggest the solution relies on making those areas more livable, with more jobs on offer. Incentives for companies to put their offices there instead of on the 17th floor of a CBD high rise. I don't know. Leave the inner-suburbs to the boomers, once they die out it can be reclaimed.
posted by Jimbob at 10:05 PM on March 11, 2016


I recently moved to Australia and could very quickly see that there was no way for myself and my partner to ever buy a house in Melbourne unless we both started making six-figure salaries.

It was devastating for her to hear it, as she's always subscribed to "the Australian Dream", but the cost of renting vs. owning if you want to live anywhere near the urban centre is laughably simple.

Add to that that houses are built for shit* and it's not a hard choice to make, at all. I have no desire to be saddled with one.

*sat on thin slabs and prone to cracking everywhere, cold during mild "winters" and hot in summer, etc.
posted by flippant at 10:30 PM on March 11, 2016


I am trying to buy my first home in the outer suburbs of a regional city. Today, the real estate agent called me after viewing a modest 3 bedroom weatherboard cottage because three other buyers were interested and if I had an offer to please let him know by 5pm.

Characterising this as a latte sipping urban millenials problem is grossly unfair.
posted by chiquitita at 10:33 PM on March 11, 2016 [3 favorites]


"As an outer-suburban guy pretty much all of my life I'd argue with that assessment, but I'd also suggest the solution relies on making those areas more livable, with more jobs on offer."

One of the stupid issues with that, absent of a city-wide plan to do it in a widespread fashion rather than focussing on one suburb at a time, is as soon as you do make those areas "more livable, with more jobs on offer" they become the next hotbed of spiralling prices. We've seen exactly that happen in Sydney, Melbourne, & Brisbane, and the early signs in quite a few regional cities (which I won't name because we hope to move to one of them sometime soon-ish & don't want to make prices worse ;).

Federal policy which largely tries to run the domestic economy through controlling domestic spending (through the coarse lever of interest rates), negative gearing, CGT, and spotty shit-poor city planning are largely responsible for that.
posted by Pinback at 10:55 PM on March 11, 2016 [2 favorites]


Jimbob: "I can't help but feel that, to some extent, our largest cities have simply reached carrying capacity. I would love to see a drive towards regional development in regional centres. Fuck Sydney and Melbourne. "

As someone who has lived in Whyalla, Adelaide and now Sydney, I mostly agree but have mixed feelings. As an ex-Adelaidean, I entirely agree with the frustrated feeling that Australian policy over-invests in just two cities, leaving few opportunities (outside of primary industry) in regional centres. It seems obvious to me that a natural way to relieve housing pressure in Sydney and Melbourne is to make places like Adelaide more attractive: it's a lovely, well-planned city with functional infrastructure and probably the strongest arts culture in the country, but fucked if you can find a job there. Everyone has to be based in SydMelb because everyone else is based in SydMelb.

At the same time, as an ex-Whyallan I have to say that South Australian policy shows the exact same planning fallacy. SA has failed dismally (even worse than other states) at developing any regional infrastructure worthy of the name, and as a state it is even more Adelaide centric than Australia is SydMelb centric. I mean, if your state's largest city is pop. 1,200,000 and your second largest is pop. 30,000 then maybe you're putting all your eggs in one basket. This feels like a terrible planning failure to me, and it's basically the same failure that you see playing out on the national scale. To the extent that you see policymakers within poorer states make the same mistakes as policymakers at a national level it seems like there's something quite fundamentally awry.

But then...

I get a little weary of inner-suburban Sydney people complaining they can't buy a house, when their criteria for where that house must be situated includes "must be within walking distance from my current favourite pub". They will accept no less than their kids attending the same primary school they did as kids.

HAHAHAHAHAHAHA.

Yeah okay whatever. I went to school in fucking Whyalla and I will accept nothing less than my children never setting foot in Whyalla. But my job is in bloody Kensington (eastern Sydney, for the US folks). Public transport there is abysmal, and the closest location where property isn't staggeringly expensive is a very long drive from the eastern suburbs. Yes, we could move a long way out west. If one or both of us were willing to spend a very long time in the car every day with kids in tow because the only child care we could find is in... Kensington. So yeah, we're absolutely giving up on the quarter acre block idea and are hoping that maybe we can find a townhouse within 30 mins drive of work that will fit the family and maybe even have a tiny patch of grass.

I can accept that we're looking at paying maybe 1.5m to do that. I can accept that we're massively privileged Gen Xers even to have the opportunity to consider this terrifying possibility. I can accept that this is cost of lifestyle and not cost of living. I can accept that this is something that is out of reach for almost the entire snake people generation, and I have nothing but sympathy for them.

What I won't fucking accept -- for myself or the Millenials for whom I have this sudden overwhelming sympathy -- is having people trotting out lazy bullshit about househunters today being too entitled or to snobby to live in the suburbs or in regional Australia. I've spent almost 40 years doing exactly that, and I'm about $500k poorer today because the house I bought way back when was located out in the sticks. I'm stuck looking for whatever I can find in inner Sydney because of a dedicated attempt to do the thing that most benefits my partner's career: she and I both need to be able to get to work in a reasonable time, and given that we have very limited choice of employers -- employers located in very inconvenient places -- we are stuck looking for housing in inner Sydney. I will not back away from that, on straight out feminist grounds: for the last 10 years my partner has been screwed over badly by the mummy-track, being stuck in non-promotable position because she had no alternatives in Adelaide to consider. Doing anything less than focusing on locations that max out her career opportunities would make me a shitty partner to her.

And here's the thing... everyone else I know tells a pretty similar story. Almost no-one is making choices the way you think they are. The only people I know IRL who get snobby about Parramatta or Adelaide or whatever are Boomers holding onto very pricy property. People mostly make the choices they do for sensible, pragmatic reasons, because mostly people aren't fucking stupid. Blaming them for making the choices they think will benefit them the most is at best unkind and at worst dangerous.

Fundamentally, this is not a problem of bad people it is a problem of bad policy.
posted by langtonsant at 11:02 PM on March 11, 2016 [48 favorites]


Okay I'll try not to dig my hole any deeper. I accept I was a dick. I'm from Adelaide too, from the city and then owned a fibro house in the Clare Valley for a little bit. The followed work to Darwin. Now we live in Tasmania, where we moved because it was the only place with a job and where we could actually afford to buy. Unemployment rate in Hobart is a little higher than the mainland. Wages are a little lower. But houses are literally less than half the price. Maybe what the rest of the country needs to fix the problem is a basketcase stagnating economy like Tasmania.
posted by Jimbob at 11:14 PM on March 11, 2016 [3 favorites]


So I'm an outsider, but I was in Brisbane not too long ago working in a field adjacent to land use planning (transportation planning) and I couldn't help but marvel at how little densification there was; there was the great shining towers of the downtown, but once you walk 15 minutes in any direction, it seemed like it was basically down to suburban houses, or at best rowhouses. When we took the train out to Sandgate, I was surprised that there was almost no evidence of increased density at rail stations; a couple of buildings at Nundah maybe. In most North American cities (and here I'm thinking of the younger, auto-oriented ones, not just Washington or Montreal), there's typically much more density within a couple of km of the CBD, and often near train stations. In Sydney, about 60% of dwelling units are detached houses, in Melbourne 75% and in the other capital cities it's more like 80%; major car-oriented cities in the US don't get over 70%, and in Canadian cities over 2 million it's 30-40%, in cities in the 1 million range it's 45-60%.

So -- not that denser cities will solve all the housing problems of the world, ask Vancouver or San Francisco about that -- why is it that there's such a suburban-only focus to Australian cities? Is it cultural, that decent people won't live in apartments? Is it in the planning, that it's very difficult to build apartments? Is it someone making it impossible to build several units to replace a single house on a 1/4 acre lot (which seems huge to me, here in "sprawl centric" Calgary a suburb is 8 to 12 units per acre, including the land used for roads, parks, etc.)? If someone, is it local government or NIMBYs or the lack of market demand or what?
posted by Homeboy Trouble at 11:22 PM on March 11, 2016 [4 favorites]


Yes.
posted by His thoughts were red thoughts at 11:27 PM on March 11, 2016 [6 favorites]


Jimbob: "I'm from Adelaide too, from the city and then owned a fibro house in the Clare Valley for a little bit.

Oh, I like Clare Valley. We had a little place in the Mitcham Hills. Weatherboard housing in bushfire country is fun.

Unemployment rate in Hobart is a little higher than the mainland. Wages are a little lower. But houses are literally less than half the price. Maybe what the rest of the country needs to fix the problem is a basketcase stagnating economy like Tasmania."

Heh. Adelaide is now giving Tassie a run for its money, but yeah Tasmanians have had it tough for a long long time.

On your substantive point I entirely agree, and I feel it's very much the heart of the problem. It is overwhelmingly annoying to see politicians furrowing their brow in puzzlement (or worse, barely concealed glee) over the crazy prices in Sydney and Melbourne while the economic stagnation in Adelaide, Hobart etc drags on and no-one will commit money to solving the problem. I have these recurring fantasies that my partner and I will both land good jobs back in Adelaide or Hobart or Newcastle or anywhere with a university that will could give us both homes, but it never worked out and I've finally been sucked into the SydMelb conglomeration like everyone else. Now that I'm here, I like Sydney. It's a nice city, and I might even love it one day. But I don't one-and-a-half-million-dollars love it. Yet I don't see an alternative, and the concentration of jobs and money in a very small geographical region is an entirely predictable consequence of policy that focuses on regional Australia only to the extent that there are some mines and farms to the west of the great dividing range.
posted by langtonsant at 11:48 PM on March 11, 2016 [1 favorite]


Not to trivialise the very real issues being discussed, but love the post title.
posted by une_heure_pleine at 11:56 PM on March 11, 2016 [6 favorites]


Just came to say the same thing, une_heure_pleine. Do you smell the serenity?
posted by snwod at 12:29 AM on March 12, 2016 [2 favorites]


I did think "This post is going straight to the Pool Room!"
posted by His thoughts were red thoughts at 12:42 AM on March 12, 2016 [7 favorites]


Is it cultural, that decent people won't live in apartments?

I can tell you what it was for us. We came here from Europe (originally from NZ, though), having lived in apartments almost our entire adult lives (as renters). We fully expected to keep renting apartments forever, and had no desire to buy a place, or live in a house. Maybe a townhouse.

But then we met the Australian style of landlording. Renting from faceless companies that never actually made any repairs or maintenance, yet wouldn't allow you to do so much as hang a picture on the wall, let alone paint the place something that wasn't the current peeling beige. You also had to accept that your rent would increase by 10-15% per year, that you could never ever own a pet, and that you would, on average, have to move once every two years because either the rent would jump by too much to handle, or the landlord would sell the place, or their "family" would be moving in so they could legally give you the boot.

Since I hate moving more than anything, I reluctantly accepted, after this happened for the fifth time that we'd need to buy. And since we wanted a cat, and did not want to be subject to insane rules about our place (friends who own apartments have been told such things as no remodeling, no installing air-con, nothing visible on the balcony, no bicycles kept in the common outside areas), we couldn't buy an apartment or townhouse either.

I would also like to point out that we have accepted (being in Sydney) that we would need to live more than 30 minutes commute away from our jobs (45 minutes to an hour drive, with no good public transport options for my husband; 60 minutes public transport or 45 minutes bicycle for me, so I guess I'm lucky). And yet the lowest priced houses we were finding (including 2-bedroom fibro cottages that would need extensive renovation to even make them safe to live in) were in the 800k + range.

So yeah, maybe it's cultural. But the culture is one of treating renters like shit.
posted by lollusc at 1:16 AM on March 12, 2016 [26 favorites]


The only people I know IRL who get snobby about Parramatta

... are wildly out of date.

The median house price in Parramatta is now well over a million dollars.
posted by lollusc at 1:19 AM on March 12, 2016 [2 favorites]


I'm just gonna drop this here.

Same deal here in NZ, maybe even worse.
posted by i_am_joe's_spleen at 1:21 AM on March 12, 2016 [3 favorites]


One more comment, and then I'll shut up - the other thing that horrified us as renters were the six-monthly inspections, where a representative from the landlord walks through your property and fills out a checklist about your housekeeping. I would understand if they were checking whether the property needed maintenance, or if you were doing something illegal in there, but they would mark you down for not having dusted on top of door frames, or having soap scum on the bathroom sink, or whatever. Things that would in no way impact the house once you did a final clean upon moving out. That violation of privacy, and humiliation (and the way the inspections contributed to my anxiety, in which my brain told me that we wouldn't be able to get a good reference for the next time we got kicked out due to the landlord selling), was another reason we ended up succumbing to the "great Australian dream".

(Also, it's why advice from people overseas is irrelevant here when they say that renters can just hang pictures or paint walls and then restore things back to how they were before they leave.)
posted by lollusc at 1:24 AM on March 12, 2016 [20 favorites]


lollusc: "they would mark you down for not having dusted on top of door frames"

We once had a real estate agent mark us down for "having furniture against the walls". I'm not sure where they thought the furniture was supposed to go, but if I didn't have better things to do with my life I'd have stacked all our belongings in the middle of the lounge room prior to the next inspection with the words "is this fucking okay?" painted on the walls underneath my written notification of intent to break lease, nailed into the plaster.
posted by langtonsant at 1:34 AM on March 12, 2016 [18 favorites]


No skin in this game, not from there, but -- that inspection routine beggars belief. Seriously? They walked through your house every six months and docked you points for having dusty door frames and furniture against the walls? That sounds like contestants from some sort of "Who's The Most Terrible Landlord" competition. Jeez.
posted by sldownard at 1:49 AM on March 12, 2016 [3 favorites]


I won't argue about lollusc's lived experience, but I really don't think it's remotely usual. A six monthly or annual inspection is supposed to be and normally is really just about making sure the place is in reasonable repair. As both a tenant and a landlord, it's certainly always been just that for me.
posted by wilful at 1:55 AM on March 12, 2016 [5 favorites]


Anyway, as already noted, the essence of the issue is CGT benefit and negative gearing. The ALP has recently proposed modest improvements on this, only to have the usual suspects bleating and moaning. A News Ltd scare campaign will doubtless ramp up before the election.
posted by wilful at 1:59 AM on March 12, 2016


I know I should shut up now, and I promise I will. I just happen to have had an annoying day dealing with Sydney property headaches and I am grumpy about the whole thing. But:

wilful: "I won't argue about lollusc's lived experience, but I really don't think it's remotely usual. A six monthly or annual inspection is supposed to be and normally is really just about making sure the place is in reasonable repair. As both a tenant and a landlord, it's certainly always been just that for me."

I get that this is what an actually not-insane landlord does, and I suspect my current landlord is one of those. Plus these days, as part of a boring middle aged couple holding onto a bucketload more cash reserves than any plausible alternative tenant than the agency will ever get in this property... yep, we get regular maintenance and nothing other than the pro forma inspection to check that we aren't running a meth lab in here. But this is the first time in my life (apart from the years I lived in the US where my landlord was a lovely woman who worked hard to do what needed doing with the few resources she had) that I have had the experience of a rental agency not treating me like scum. In the other five places I have rented in Oz I would routinely get exactly the kind of shit lollusc is referring to. I've been told off for not dusting air conditioning vents, not cleaning my own furniture to the agent's satisfaction, not cleaning an oven that I hadn't actually used yet, and yes, placing furniture against the walls. I know how utterly mad that last one sounds, but it really truly happened. I have no idea why.
posted by langtonsant at 2:16 AM on March 12, 2016 [5 favorites]


We have an eighth of an acre (around 500sq.m according to my maths) and it's plenty big enough for a block, and around 300sq.m is also pretty healthy (also lived in 100sq.m and that was just dandy, so I can't imagine why too many people would needs a block that large.

On the other hand, there has been so much infill recently that not only are there too many people in our street, the services are just not keeping up with demand, which is probably down to a lack of investment.

I have no idea if the largest cities have reached carrying capacity, but it certainly feels like it.

But there are cheap houses around. Cheap as. So cheap.

(friends who own apartments have been told such things as no remodeling, no installing air-con, nothing visible on the balcony, no bicycles kept in the common outside areas),

These are not insane rules. They are mostly practical. Why would a tenant be allowed to cut holes in walls to install aircon? Are they going to take it when they leave?

Regular inspections are all over the shop, and are entirely down to the property manager (who gets to charge the landlord for them). And, for my experience, sometimes they don't notice stuff where, say, the tenant has decided to carve words in walls. But I think the whole landlord experience is a bit of a derail.

Now, I'm going back to working on ways to fuck over millenials.
posted by Mezentian at 2:20 AM on March 12, 2016


Oh, god, the tyranny of strata agencies. It's like everything terrible about HOA except they have more leverage over your ability to keep your residence. We moved in to a Sydney apartment that was listed (by the unit owner) as pet-friendly, with our dog explicitly written into the lease, and within a couple of weeks we were getting nasty letters from the strata telling us to get rid of our non-barking dog due to "complaints". (We didn't, on advice of the managing real estate agency, who advised us it'd take longer for them to evict us than we were planning on staying in that place anyway) Later on our internet (which I needed since I worked from home) went out, as it turned out, because when the unit was renovated before we moved in, they ran the line under the new floor without enough space between the wood to account for wood expansion in the summer, and it basically cut the line in the house. In lieu of tearing up the floor, the owner approved an electrician to just run a line next to an existing line to another unit outside and up the wall into our unit. The strata started sending us letters about how they were going to come tear out that line because it was lowering property values by defacing the side of the building or some shit like that. Fortunately in both cases we just punted it to the owner's management agent who had a serious case of IDGAF and was willing to tell the strata members so, but yeah, made for some periods of dread and panic while we tried to work it out. And let's not get started on the whole hanging washing on the balcony. You know the #1 thing my husband and I were both excited about when we moved to middle-of-bumfuck-nowhere regional Cairns and bought a house? Hanging our bloody laundry on the balcony to dry. Bliss. BLISS. Fuck stratas.

In apartments I've lived in in the US, I was allowed to put small holes in walls to hang things, paint walls (I did always check with the landlord first), install window AC units, change curtains, leave property in common storage areas, etc, with no problem. This sort of stuff, as well as "my dog had a panic attack and scratched the bathroom door a lot", weren't even mentioned when I moved out. Learning about strata rules and inspections here explained a lot when my Australian husband panicked about our sofa scuffing the wall slightly.

Anyway, I don't really know how anyone can consider someone snobby for not considering living in the outer outer suburbs when both driving and public transport from those areas of Sydney to any place a professional career might exist is bordering on 1.5-2 hours a day (and let's not talk about the cost of the tolls if you take any of the tunnels). The roads are not in any way designed to make that feasible if you also hope to have a family that you see ever during the week. This is basically the same calculus I just used to give up on moving to San Francisco for a job - we couldn't afford to live anywhere that would allow me a commute under 3 hours RT each day. At least I have my pick of other cities full of jobs in the US.
posted by olinerd at 2:30 AM on March 12, 2016 [6 favorites]


But there are cheap houses around. Cheap as. So cheap.

That's fine if you want to live in Laverton, WA. A virtually dead 'town' with a population of 417 and an average summer temperature of 37 degrees. Incidentially, in 2001 it had a population of over 2000. That's why house prices are cheap.
posted by His thoughts were red thoughts at 2:38 AM on March 12, 2016 [5 favorites]


(friends who own apartments have been told such things as no remodeling, no installing air-con, nothing visible on the balcony, no bicycles kept in the common outside areas),

These are not insane rules. They are mostly practical. Why would a tenant be allowed to cut holes in walls to install aircon? Are they going to take it when they leave?


They're not tenants. They're owner occupiers.
posted by His thoughts were red thoughts at 2:40 AM on March 12, 2016 [7 favorites]


Mezentian: "But there are cheap houses around. Cheap as. So cheap."

Oh, man. Does Laverton have a university? Preferably one interested in hiring a quantitative social scientist and a biostatistician? No? Pity. Because that is some gorgeous countryside you have there and if there's one thing I miss about my childhood it's the red dirt, the big sky and the saltbush. But I suppose that's the fundamental problem in a nutshell -- Australians don't actually all want to live in inner Sydney. It's a nice place. But it's not that nice, and I for one miss the desert. Adelaide made a nice approximation to it but it's far too green. If I could follow some of my friends to Karratha I would. But I can't.
posted by langtonsant at 2:41 AM on March 12, 2016


Yeah the Body Corporate can be a pack of cunts. Even when the landlord is fine, the interfering old biddy on the committee is busy making up rules, while refusing to spend money on actually improving the overall property. We couldn't get air con installed for the benefit of our tenants because of bullshit rules.
posted by wilful at 2:51 AM on March 12, 2016 [1 favorite]


But then we met the Australian style of landlording.

Australian land-lording has not caught up with landlord investing. I blame real estate companies for mismatching social need with conservative intentions and investment strategies. With so many wealthy now owning ‘investment properties’ which they rent out as homes to others, the real estate agents who manage the properties still conceive of renters as ‘passers through’ and not home occupiers. This results in our short leases (1 yr max in general) and the disallowance of the tenant to make any personal cosmetic changes. If these so-called investors (rorters if you ask me with their 50% discount on capital gains - what other investment model provides that discount on capital gains in Australia?) were required to actually commit to home investment, there would be multiple year leases available and a leeway for making cosmetic changes.

There is a gaping social hole in our current housing strategy and while the inequity of high percentage profit gains and discounted capital gains is allowed to continue, prospective home buyers will be priced out of the market and renters will not be able to gain stability and sustainability from their rentals.
posted by Thella at 3:10 AM on March 12, 2016 [4 favorites]


langtonsant, check out Armidale, NSW.
posted by Thella at 3:11 AM on March 12, 2016


(rorters if you ask me with their 50% discount on capital gains - what other investment model provides that discount on capital gains in Australia?)

Shares.
posted by His thoughts were red thoughts at 3:22 AM on March 12, 2016


I worry about the implications of a lower percentage of homeowners in retirement. Every financial planner I've spoken to here assumes that we are looking/willing to buy under the current conditions, and that our retirement spending will be quite low because the house will be paid off.

We're in our early 30s with excellent salaries and a high savings rate. We live in what was the outer Melbourne suburbs when we moved in four years ago, but is now considered a trendy (expensive) neighbourhood. I don't think we'll ever be able to buy while keeping a lifestyle that is important to us. One day we'll have to choose between living in an area we love, where we can cycle to our jobs, and "putting down roots" / "building equity" a 90 minute commute from our tech jobs.
posted by third word on a random page at 3:25 AM on March 12, 2016


But I think the whole landlord experience is a bit of a derail.

Not really, when articles like this claim the reason people want to buy instead of rent is some sort of inexplicable commitment to a cultural dream of homeownership, when it often can be explained by how unnecessarily unpleasant the renting experience is instead.
posted by lollusc at 4:20 AM on March 12, 2016 [7 favorites]




That's fine if you want to live in Laverton, WA.

That was the joke. Or, you know, the fertile hunting ground for bootstrappy types.

If I could follow some of my friends to Karratha I would. But I can't.

On the plus side, real estate values in K-town are not what they once were, McDonald's workers are no longer getting insane wages, and there are motivated sellers.

(I do think, in 20-odd years, they might get a Uni up there. I've not been to Karratha, but in the last 20-odd year5s more livable places like Albany and Bunbury have got campuses, so why not Karratha?

Yeah the Body Corporate can be a pack of cunts. Even when the landlord is fine, the interfering old biddy on the committee is busy making up rules, while refusing to spend money on actually improving the overall property. We couldn't get air con installed for the benefit of our tenants because of bullshit rules.

This to me is weird.(I also missed His thoughts were red thoughts owner-occupiers thing so...)

We are "property investors" (and we pay a shitload of money to subsidise out tenants' rent - and being investors we may be part of the problem, but that is the system we live in, and we needed to buck against it or try and ensure we had some sort of retirement 'savings' because super is a con) and we are on the strata committee.

It's a (what I thought would be manageable) small block, close to the inner city, and not overly excessive in rent and close to PT.

I won't do into the details, but we recently tried to put air on in and the building cannot cope with one more air con unit (we are told, by electricians). The infrastructure leading into the block needs to be upgraded, and as half of the units have aircon and that will cost +$20K we've been denied.

(And, yes, there were issues with running conduit between the power board and the flat, regardless of the fact 50% of the flats already have it.)

I raised the usual equity issues, but the folks who have aircon have it, and they don't want to fork out the money from the ungodly strata fees we pay to deal with the issue.

There are some serious issues with the block, and would you believe it, they will cost +$20K to fix, which is the point the strata committee needs to vote (which we do once a year, and apparently we cannot change that), and when we do have a meeting: my god. Humanity is stupid and myopic.

We spent 30 minutes last year talking about people's washing on balconies (which is apparently a huge issue for people living on the ground floor with Unexpected Underwear).

I can't exactly defend the Australian style rental market, and I can't exactly call for sympathy (we, after all, pay two mortgages a week) but until I was on this side of the fence, I had no idea what kind of crap landlords have to deal with.

I also know that we bought into the market, and we should not be penalised if, say, they scrap negative gearing. Which if they do they should grandfather and phase out.

Every financial planner I've spoken to here assumes that we are looking/willing to buy under the current conditions, and that our retirement spending will be quite low because the house will be paid off.

Current conditions are current. You have to live within them.You can account for some kind of backwardisation (is that the right term, economics wonks?) and if I were in the market now I'd be holding off a smidge, but housing prices are still going to go ahead at some point, and if you can find a place under $350K that suits and your income is $70-100K (single, or as a couple) it should all work out. Probably. But the first five years will suck.

We've had 20 years of economic growth (property prices have risen 400% since the mid-90s in the areas I look at). People, especially those a but younger that me who don't remember the recession we had to have or hypercolour don't know what life is like outside boom times.

We (and they) are about to find out, the hard way.
posted by Mezentian at 5:01 AM on March 12, 2016 [1 favorite]


and one of the lowest for mortgage defaults

easy to avoid defaults when prices never go down . . .

https://research.stlouisfed.org/fred2/series/AUSCPIHOUQINMEI and http://i.imgur.com/7MCk6b0.png

Germany is the only OECD economy that has their housing policy sorted AFAIK, and I don't really know how they do it (rentership is high, yet cost of living is low).

Real estate is a special form of capital wealth. Our current economists refuses to study it as its own class of wealth, but it is not like any other form of wealth -- it cannot be manufactured or imported and per the fpp we'd all like much more -- our own private parkland essentially -- than the market can possibly supply.

As social policy, one reform is to tax the shit out of people/corporations doing buy-to-let. This is simple parasitism, acquiring existing wealth and not creating it.

And social policy should encourage building more supply. One of the best ways to to do this is untax the sticks and bricks and uptax the parcel value, requiring those who want exclusive use of scarce acreage of the commons to pay everyone else dispossessed thereby.

Prosper Australia is one Georgist voice from Australia I'm familiar with.
posted by Heywood Mogroot III at 5:38 AM on March 12, 2016 [2 favorites]


Quite frankly, pork- barreling in the US has contributed to the establish of livable medium-sized towns across the US, each with their own university or factory or government office providing employment. We don't have nearly enough of that. Everything seems incredibly concentrated towards inner-Melbourne and Sydney.

This is true -- the US has spent a gazillion dollars placing public universities in small towns (and additionally most state capitols are in small towns, not in the big cities), somewhat for strategic Cold War reasons but mostly for political pork. Ditto state and federal prisons, military bases, and other public infrastructure. But it is also the reality that the vast majority of the US population lives in large urbanized areas, not in small towns. So while living in tiny college towns is normal for academics, most Americans live and work in large metropolitan areas, and those areas are where US housing statistics come from. Those rural public investments are not why US housing prices are lower than in Australia, but they do provide a non-urban option for a significant number of educated, mobile people.

The articles and discussion here are fascinating, because I would have (ignorantly) thought that Australian housing costs and policy would have echoed or mirrored the US's, because both countries have lots of sheer space, with the possibility of creating cheap(ish) housing by building vast new suburbs on the outer edges of cities as well as increasing infill density. Neither mechanism seems to be functioning in Australia, or maybe the market capture by speculators has hit a point that is high enough to change how that market functions.

I get that this is what an actually not-insane landlord does, and I suspect my current landlord is one of those. Plus these days, as part of a boring middle aged couple holding onto a bucketload more cash reserves than any plausible alternative tenant than the agency will ever get in this property... yep, we get regular maintenance and nothing other than the pro forma inspection to check that we aren't running a meth lab in here.

I've dealt with two landlords in the last couple of years, and the difference from when I was younger and poorer is just outrageous. It makes me resent even more how terribly I was treated by landlords when I had no other options, and how many of them abuse that difference of power. I can absolutely understand how that drives people to buy -- it was a major component in why we bought our first house and are owning now, just to not have to deal with that relationship.
posted by Dip Flash at 6:01 AM on March 12, 2016 [1 favorite]


I just happen to have had an annoying day dealing with Sydney property headaches and I am grumpy about the whole thing.

Ah yes. Or as I like to call them, 'Saturdays'
posted by Panthalassa at 6:05 AM on March 12, 2016 [2 favorites]


Awful person but successfully humorous Australian humorist David Thorne has this account of a run-in with a typical strata agent conducting a property inspection, to give some idea of how tremendously miserly they can be.
posted by Panthalassa at 6:15 AM on March 12, 2016 [2 favorites]


Came for the Courtney Barnett, wasn't disappointed.

Canadian cities are similar. Someone cleverer than me on mefi said that our economy is basically just people selling houses to one another. The real estate boards wield immense power; they've blocked publication of termite maps because it would threaten house prices (and thereby, their livelihoods).
posted by scruss at 6:32 AM on March 12, 2016 [1 favorite]


>>We are "property investors" (and we pay a shitload of money to subsidise out tenants' rent - and being investors we may be part of the problem, but that is the system we live in, and we needed to buck against it or try and ensure we had some sort of retirement 'savings' because super is a con) and we are on the strata committee.

Your renters, as taxpayers, are subsidising the capital gains tax concession you're presumably holding out for to make it all profitable. Yes, you are part of the problem, but it is mostly bad policy rather than individual greedy choices.
posted by chiquitita at 8:12 AM on March 12, 2016 [1 favorite]




Can someone explain the Strata Agent thing to non-Australians? Is that something like an agent for a condo board who makes up all kinds of petty rules for common/shared space?

I dealt with lots of petty stuff when I was renting as a student in a shared apartment to big corporate owners here in the US (in a conservative state with few renter rights). Monthly inspections, white glove tests for dust on top of the refrigerator, fines for minor things, that kind of stuff. Since moving out of student apartment hell, my interactions with landlords became much more reasonable--main exceptions being large corporate-owned complexes with the cheesy flags waving out front and their own rental offices on site.

Those flags mean "stay far away." They'll put you under chain smokers, in flimsy construction where the smoke falls out into your unit constantly so you live in an ash tray and refuse to move you even though you've been there less than a day and other units are free. True experience

Come to think of it, my most awful rental experiences have always had a strong correlation with being run by large corporate landlords who have completely insulated themselves from any contact with how anything is run and don't give two craps so long as the money keeps rolling in.
posted by clickingmongrel at 8:36 AM on March 12, 2016 [1 favorite]


Statements that "we need to live in the inner suburbs so we don't have to drive 2 hours to work" are completely reasonable. The problem comes when everyone has to live in the inner-suburbs because no one wants to drive two hours to work. Everyone has the same problem, there simply isn't enough physical space for all the houses for all the people to need to live close to the city. There are only two feasible solutions; make the houses smaller/stack them on top of each other, and spread the jobs around more so six million people aren't all insisting on living less than 20 minutes away from the same place.
posted by Jimbob at 10:15 AM on March 12, 2016 [1 favorite]


I briefly looked at housing in Melbourne and Sydney last year, and even GC/Brisbane/SC, and concluded that I might as well be looking almost anywhere in California instead. For that matter, there are beachfronts in California that are more reasonable. Heck, Melbourne made San Francisco looked positively affordable.

(I'm also not convinced renting is much better, since even decent apartments seem to come at crazy, Manhattan-ish costs.)
posted by rokusan at 10:43 AM on March 12, 2016 [1 favorite]


langtonsant, check out Armidale, NSW.

The funny thing about that is many people* who work at UNE live in the much nicer nearby town of Uralla and commute. People will always be prepared to commute when there's a better place to live that isn't too far away.

*In my admittedly somewhat limited experience.
posted by GeckoDundee at 11:34 AM on March 12, 2016


Relevant, from The Monthly. It's long form, stick with it.

My partner and I bought a shitbox on a half block (400m square) in an "inner outer" suburb eighteen years ago. Shitty house which we maintained but only improved a little bit because we could never decide whether to knock it down or sell and move on. But because it was a shitbox it was cheap, and because it was cheap we now own it outright.

Now we're about to move. We're both on excellent incomes and we have no kids. But there is absolutely no way we could afford to move anywhere within 90 minutes reach of the city except for a series of unforeseen coincidences, such as the suburb becoming highly sought after because it's in a great school zone, meaning we were able to sell even though the house is crap; and because my partner very sadly lost his parents, he inherited some money which let us supplement our savings to get a good deposit down.

Now the local council are trying to bring in rules that demand everybody have 5 metre setbacks from the back fence, on top of the existing 7.5 metres from the road, because the older residents are getting shitty about developers putting two or three homes on a single block and ruining their peaceful leafy suburb. Some of them are quite happy to have their own investment McMansion townhouses, but they'd prefer not to have to live near them.

I would love us to be able to move out of Melbourne altogether and get into a regional centre. Really what we need is government and business to start investing in putting their offices in regions rather than the city - and I mean not just Geelong or Bendigo, but further out. Professionals won't move there unless the jobs are there, but if the jobs go there, people will follow.
posted by andraste at 1:52 PM on March 12, 2016


Somewhat apposite, as it deals with quayside tax policy more broadly, is this article by Mike Seccombe in the Saturday Paper.
posted by wilful at 1:53 PM on March 12, 2016


My dad (with a friend's help) built his own 25x40 home, with a concrete basement and stuccoed exterior, which he and my mom lived in for 50 years. They lived in a small downtown apartment until it was finished. He had no carpentry experience, just a set of books, and a purchased plan. The home never leaked or needed significant repairs beyond maintenance. The mortgage was paid in 15 years.

For someone (with disposable income) who can get land and materials at reasonable costs (especially recycled), and is willing to learn and take the time, there are options. Even if it means starting in a 10x15.

“If you have built castles in the air, your work need not be lost; that is where they should be. Now put the foundations under them.” - Thoreau
posted by Twang at 1:58 PM on March 12, 2016


Quayside? Not sure how predictive text got that from Australian, or how i missed it.
posted by wilful at 2:01 PM on March 12, 2016


Can someone explain the Strata Agent thing to non-Australians? Is that something like an agent for a condo board who makes up all kinds of petty rules for common/shared space?

Come to think of it, my most awful rental experiences have always had a strong correlation with being run by large corporate landlords who have completely insulated themselves from any contact with how anything is run and don't give two craps so long as the money keeps rolling in.


So to me the awfulness of stratas is that, at least in my two experience (one here in Oz, one in the UK), the building and its rules aren't managed by some faceless corporation, it's instead a board of owner-occupiers who resent renters because we are so transient and don't have buy-in. As a result, the interactions end up being incredibly passive-aggressive. Take my dog example above - we know exactly which person "complained" about our dog. She regularly stopped to chat with us, seemingly friendly, in the parking area, and one day we had our dog with us after a trip to a park and it was a day or two after that that we received our sternly worded letter. She was totally friendly in the conversation and never mentioned the dog to our faces - it was through her management role on the body corporate that she complained. Same thing in the UK where one guy (again, someone we knew and saw regularly in the building/garage) on the board literally went out front on the first warm sunny day of spring, checked to see who had laundry drying (on racks, not even over railings or lines) on their balconies, and called the individual unit managers to chastise their tenants. It honestly feels like its gives busybodies this shield to hide behind while they can be passive aggressive assholes to you because you aren't in a financial/logistical/whatever position to buy like they did.

And it's not like this is only in giant apartment buildings - some friends of ours owned a unit in, like, a older six-unit building, and when another unit on the ground floor came up for sale they seriously considered buying it just so they could have an extra vote on the board and shut the annoying people up.

The faceless management company that owned my four-story walk-up in Boston were less obnoxious to deal with. For them, it was just business.

Current conditions are current. You have to live within them.You can account for some kind of backwardisation (is that the right term, economics wonks?) and if I were in the market now I'd be holding off a smidge, but housing prices are still going to go ahead at some point, and if you can find a place under $350K that suits and your income is $70-100K (single, or as a couple) it should all work out.

I'm pretty sure the "if you can find a place under $350k" is the problem.
posted by olinerd at 2:07 PM on March 12, 2016 [4 favorites]


andraste, we made the move, to Warragul, five years ago, and you'd be surprised how many commuters there are into the CBD (including my wife) on a 100 minute train trip. But it's the lifestyle and the housing price.
posted by wilful at 2:08 PM on March 12, 2016


olinerd, yep that's it. We had a flat in a large block in St Kilda, mostly investors, but the committee was dominated by the owner occupiers who were as you describe. We just wanted a quiet life, no hassles for our tenants, but nope...
posted by wilful at 2:12 PM on March 12, 2016


Now the local council are trying to bring in rules that demand everybody have 5 metre setbacks from the back fence, on top of the existing 7.5 metres from the road, because the older residents are getting shitty about developers putting two or three homes on a single block and ruining their peaceful leafy suburb.

Setbacks can be useful.

But, I am biased. I do stuff like sign petitions against excessive high rise developments, and I grumble about infill in my street.

I'm pretty sure the "if you can find a place under $350k" is the problem.

Admittedly, Real Estate.com's search function sucks, but there appear to be plenty of properties below that threshold everywhere I checked.

(I must say, having had just a few years experience with the business end of stratas: I wish I had never bought into one.)
posted by Mezentian at 2:51 PM on March 12, 2016


such as the suburb becoming highly sought after because it's in a great school zone,

I find it deeply, deeply disturbing that this has become a Thing in parts of Australia now. All it does is entrench inequality. It's only one step away from the US model of funding schools with property taxes. Glad we (still) have school choice in Tasmania.
posted by Jimbob at 3:26 PM on March 12, 2016 [2 favorites]


Admittedly, Real Estate.com's search function sucks, but there appear to be plenty of properties below that threshold everywhere I checked.

In Sydney metro, those are mostly studio apartments or serviced rooms that can be only used for short term residental. Good luck raising a family in one of those.
posted by His thoughts were red thoughts at 3:42 PM on March 12, 2016 [2 favorites]


Mezentian, setbacks can be useful yes, but anyone on a half block is stuffed under those rules. We woulf have a grand total of 8 m square to build on, including driveway, if they get their way.
posted by andraste at 4:05 PM on March 12, 2016


We woulf have a grand total of 8 m square to build on, including driveway, if they get their way.

What? Haven't you always wanted to live in a lordly tower? (Assuming, badly, I suspect, there are no height restrictions.
posted by Mezentian at 5:03 PM on March 12, 2016


Or if they aren't studios or short term only they are for over 55s

A few years ago I was house hunting in the 350k range. It was so stupid. Couldn't get a mortgage on the places I could afford (tiny flats of around 35-40 m2) since the banks don't like lending on anything less than 50m2. Even though that's all I needed and was the size of the place I'd been renting the past decade. Ended up with a two hour commute each way but I live in a gorgeous home in a gorgeous area that's cheaper because it's not SydMelb.

But I look at my place sometimes and wonder why I now have a big house to clean when I'd have been fine in something tiny. But I wanted pets and renting is just so unstable, I couldn't commit 20 years to a rescue cat without the stability of owning.

So I commute four hours a day so my darling kittycats can have a proper home. Im happy for now and don't want to go back to the insanity of Sydney but I dream of downsizing to a tiny house in the country.
posted by kitten magic at 10:51 PM on March 12, 2016 [1 favorite]


lollusc: "they would mark you down for not having dusted on top of door frames"

Finger marks on light switches! Wtf!
posted by jacanj at 5:41 AM on March 13, 2016


I will add my personal story here - I worked in Mel around 1999, someone got me into buying a piece of land on the Mornington Peninsula - 100mt to the beach, rather large plot - and we built a beach house on this.

Fast forward to 2016. Properties same size around us are going for 1.5 mio which is like 15 - 20 times the purchasing price ... but the interesting part is that the area was at time populated by carpenters, handymans etc - fibro shacks, shitpipe and the like. When you went surfing at the beach it was crowded by 20-40 guys basically all the time.

Now the guys all sold and "retired" moving to Tasmania (better surf and still some handymans jobs around), some of the guy sold properties for 1Mio that orginally had been bought for 50 grand...

Last time I went surfing there, I found only 1 guy (and it was an expat working in Dubai)...

One thing that worked in Switzerland was to give income tax authority to the local cities. This way towns in the (swiss) "never-never" could lower taxes to attract companies and residents, and large cities would slap you with huge taxes to prevent rent growth.

The fact that Switzerland has probably the best train infrastructure of the world also helped a lot.
posted by elcapitano at 6:25 AM on March 14, 2016


Increasingly, there are jobs that can be relocated to non-Sydney/Melbourne locations. I live 2 hours out of Sydney by rail (ironically commuting as I write this) and know plenty of writers, graphic designers and other white collar people who work remotely.
The emerging issue for my family is the lack of local work for my kids. Their options if they want a high paying job (as in, more than retail wages) are pretty much to move elsewhere. This is a disappointment if you hope to remain in close contact with your family.
I would favour a focus on regionalisation/de-centralisation, but this has been tried before, and what happens is it is funded for a while, then falls to cost cutting.
Even promoting metro fringe development would open up more cost effective housing for those workers, but the continued focus on CBD only is a killer.
posted by bystander at 1:29 PM on March 16, 2016


Just nothing, today I discovered out investment flat, which we paid around $300,000 for two years ago (sadly, for us, values have come back a little since sold in the late 1990s for $55K.

I knew properly prices had gone up a lot, but sixfold in 20 years... does seem excessive.
By some rough estimates, property values doubled (for inner suburbs) between 2000 and 2004 and doubled again by 2012.

I have no idea what wages did in that time (I doubt they even close to doubled), but I know the price of a pint increased 400% (I can't get this link to work proper, but if this link can be trusted, rates of pay per hour have declined under the Abbott-Turnbull government).
posted by Mezentian at 4:54 AM on March 17, 2016




Australia’s ghost suburbs a ‘national scandal’

Entirely Sydney-Melbourne focused, but apparently there could be 170,000 houses across those two cities left vacant, with overseas buyers having the finger pointed at them.
posted by Mezentian at 8:30 PM on March 27, 2016


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