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Whilst I don't disagree with you. That doesn't mean those with mortgages aren't struggling to pay. Also if true, that is insane that the average american lives

Whilst I don't disagree with you. That doesn't mean those with mortgages aren't struggling to pay. Also if true, that is insane that the average american lives in a home that they own by the time they're 35. That is so far and wide not the case here in Australia. Here in Australia, we don't have fixed rate mortgages for the life of the mortgage we have variable and fixed upto around 1-5 years. Our interest rates have gone from around 2-3% to over 5.8% and the value of homes since COVID have gone up enormously, some 30-40% across our cities and nationally combined 27%. I know we're just talking about the US here I assume, but I earn a chunk above the average salary and I be considered "at risk" in affording the average cost of a home. I know plenty of people who bought their house 3 years ago right when COVID kicked off, of which they would not have been able to afford it today given the increase in just house prices.

skissane 3y ago
> Here in Australia Australia has made a bunch of home-ownership-unfriendly decisions which the US hasn't – e.g. in the US you get a mortgage interest deduction on your primary residence, in Australia you only get it on investment properties (joint filing for married couples, which the US has but Australia doesn't, also helps here); in the US owner-occupier mortgages are normally no-recourse, in Australia they are almost always full recourse; US government policy encourages long-term fixed interest mortgages, the Australian government has no comparable policy Some of it is also geography – Australia is very centralised, with most people living on the coast. Each state has its population dominated by a single metro area which also serves as the state capital – quite unlike the US where majority of the time the state capital is outside the state's largest metro area. Australia's comparative lack of rainfall inland is a factor, but political culture, and hence decisions by politicians, also plays a big part – suppose NSW moved its capital to (say) Dubbo or Bathurst? Many government jobs would leave Sydney, followed by many consulting/etc jobs which provide services to the government - right now, central and western NSW has plenty of affordable housing, but a big shortage of jobs providing incomes to pay for that housing. Never going to happen: it would require a degree of originality and thinking outside the box of which Australian politicians are constitutionally incapable.
- NoPicklez 3y ago
  Some of those things I agree with, however the issue was primarily sparked during COVID like in many countries. Houses prices were relatively affordable prior to COVID and increases in inflation. Australia kept its record low interest rates in place during COVID, then we had runaway inflation to record high’s like many countries did and our reserve bank failed to increase interest rates even slightly to help with the increases to inflation. We increased overseas migration significantly to help drive growth in the economy which has created an enormous shortage of housing supply. As a result, interest rates have soar’d coupled with record high inflation our cost of living has skyrocketed including housing prices. As I said since 2019-2020 house prices have increased 30%+ Our country has always been centralised to the coast and isn’t necessarily the reason for these costs
  - skissane 3y ago
    People have been complaining about housing affordability in Australia for years. I remember endless discussions of it, media articles about it, and feeling its pain myself, 20 years ago. No denying it has gotten worse, but it was already rather bad. That said - we bought our house (NSW Central Coast) in late 2015 for AU$550K. At the peak of the COVID price surge, those property value websites were saying it was over AU$1 million. Now they are saying it is only AU$850K. Still gone up a fair bit compared to when we bought it, but also fallen a fair bit off the peak. Of course, those websites are not completely accurate, but what they say is consistent with sale prices of comparable properties in our neighbourhood
    - NoPicklez 3y ago
      That’s fair enough. Complaints are valid, I do feel that things have become too unaffordable. I lived in a rental which was sold in 2019 for $580k and I remember people thinking that was high, now that house is worth $760k. Looking at suburb medium prices skyrocking in only 3 years does put a dampener on things
- hnick 3y ago
  Reminder that Dubbo (population of only ~40,000) had to have water shipped in on trucks during the recent drought, so there are valid environmental reasons for the current layout too. A lot of those cheaper places are struggling, they cannot support large populations, and it's been said we've used up the good topsoil over the last 200 years so farming may be facing some issues in the coming years too. I do think we should decentralise, but it will likely look more like Newcastle and Wollongong growing, which will probably feed commuters into Sydney more than they already do. Also note, Canberra kind of fits your description - a regional "town", servicing the government. And it's also very expensive. As in, recently reported to be the second most expensive place in the country to buy a house, after Sydney. I think our issues are far more political as you point out, so other fixes are just bandaids, but anything that impacts home prices will be unpopular with the dominant voter bloc.
sjy 3y ago
> that is insane that the average american lives in a home that they own by the time they're 35. That is so far and wide not the case here in Australia. The stats seem pretty similar here – 50% of 30-34 year olds owned their own home in 2021: https://www.housingdata.gov.au/visualisation/home-ownership/home-ownership-by-age-group https://www.housingdata.gov.au/visualisation/home-ownership/...

skissane 3y ago

> Here in Australia Australia has made a bunch of home-ownership-unfriendly decisions which the US hasn't – e.g. in the US you get a mortgage interest deduction on your primary residence, in Australia you only get it on investment properties (joint filing for married couples, which the US has but Australia doesn't, also helps here); in the US owner-occupier mortgages are normally no-recourse, in Australia they are almost always full recourse; US government policy encourages long-term fixed interest mortgages, the Australian government has no comparable policy Some of it is also geography – Australia is very centralised, with most people living on the coast. Each state has its population dominated by a single metro area which also serves as the state capital – quite unlike the US where majority of the time the state capital is outside the state's largest metro area. Australia's comparative lack of rainfall inland is a factor, but political culture, and hence decisions by politicians, also plays a big part – suppose NSW moved its capital to (say) Dubbo or Bathurst? Many government jobs would leave Sydney, followed by many consulting/etc jobs which provide services to the government - right now, central and western NSW has plenty of affordable housing, but a big shortage of jobs providing incomes to pay for that housing. Never going to happen: it would require a degree of originality and thinking outside the box of which Australian politicians are constitutionally incapable.

NoPicklez 3y ago
Some of those things I agree with, however the issue was primarily sparked during COVID like in many countries. Houses prices were relatively affordable prior to COVID and increases in inflation. Australia kept its record low interest rates in place during COVID, then we had runaway inflation to record high’s like many countries did and our reserve bank failed to increase interest rates even slightly to help with the increases to inflation. We increased overseas migration significantly to help drive growth in the economy which has created an enormous shortage of housing supply. As a result, interest rates have soar’d coupled with record high inflation our cost of living has skyrocketed including housing prices. As I said since 2019-2020 house prices have increased 30%+ Our country has always been centralised to the coast and isn’t necessarily the reason for these costs
- skissane 3y ago
  People have been complaining about housing affordability in Australia for years. I remember endless discussions of it, media articles about it, and feeling its pain myself, 20 years ago. No denying it has gotten worse, but it was already rather bad. That said - we bought our house (NSW Central Coast) in late 2015 for AU$550K. At the peak of the COVID price surge, those property value websites were saying it was over AU$1 million. Now they are saying it is only AU$850K. Still gone up a fair bit compared to when we bought it, but also fallen a fair bit off the peak. Of course, those websites are not completely accurate, but what they say is consistent with sale prices of comparable properties in our neighbourhood
  - NoPicklez 3y ago
    That’s fair enough. Complaints are valid, I do feel that things have become too unaffordable. I lived in a rental which was sold in 2019 for $580k and I remember people thinking that was high, now that house is worth $760k. Looking at suburb medium prices skyrocking in only 3 years does put a dampener on things
hnick 3y ago
Reminder that Dubbo (population of only ~40,000) had to have water shipped in on trucks during the recent drought, so there are valid environmental reasons for the current layout too. A lot of those cheaper places are struggling, they cannot support large populations, and it's been said we've used up the good topsoil over the last 200 years so farming may be facing some issues in the coming years too. I do think we should decentralise, but it will likely look more like Newcastle and Wollongong growing, which will probably feed commuters into Sydney more than they already do. Also note, Canberra kind of fits your description - a regional "town", servicing the government. And it's also very expensive. As in, recently reported to be the second most expensive place in the country to buy a house, after Sydney. I think our issues are far more political as you point out, so other fixes are just bandaids, but anything that impacts home prices will be unpopular with the dominant voter bloc.

sjy 3y ago

> that is insane that the average american lives in a home that they own by the time they're 35. That is so far and wide not the case here in Australia. The stats seem pretty similar here – 50% of 30-34 year olds owned their own home in 2021: https://www.housingdata.gov.au/visualisation/home-ownership/home-ownership-by-age-group https://www.housingdata.gov.au/visualisation/home-ownership/...