TV producer and freelance writer, Tom Whitty’s frustrations of living in the largest housing asset bubble in Australia’s history has gone viral today. What originated in the main stream media has spread rapidly to social media and forum sites around the country. At the time of writing this, it has 862 comments on the Sydney Morning Herald, the link has been tweeted 176 times and shared on 1200 facebook pages.
Tom shares his frustration of being dragged around by his girlfriend, looking at over priced and under quoted dog boxes out of this price range. He is tired of lack of political willpower to do anything about negative gearing, or the lack of enforcement of regulation in the real estate industry.
You can read his frustrations here.
» Sick and tired of chasing dreams of finding a home – The Sydney Morning Herald, 5th April 2013.
I think it would be a good idea if things actually got worse. Say, the average home will rise to 12 times the average income, heck no make it 15 times!
I want to increase the tax breaks for investors even further.
I want things to get so bad that there are articles like this one every week and there are people marching in the streets and harassing politicians about the woeful state of our housing market.
Bring it on!
IMJ housing is simply one part of a bigger story. It’s ALL buggered in it’s current form. Food, land use, water, education, health care, employment, leadership, community, societal values even HOUSING. They are all inseparable issues that must be addressed as a whole. You can’t simply sit on the curb complaining that you couldn’t join that rotten party. The answer is to walk away from it all. Just do it. There are many ways to go about this. Check out Early Retirement Extreme on the net. Peace. Glenn
I’m a little reserved about harassing politicians about housing affordability. They will just introduce a new grant to ‘fix it.’
I’m more supportive of the first home buyer strike. We need to educate first home buyers and Tom Whitty’s girlfriend what the woeful state of the housing market is and what actually caused it. Many still have no idea how big this bubble is and the financial suicide they will commit leveraging up into it. It will be a mistake they will have to live with for the rest of their life. (Unless the government bails them out, this is possible)
Wouldn’t it then be lovey when the market starts to correct, to see our politicians introduce grant after grant and boost after boost only to have no takers. It’s not that farfetched, because it is already happening in new homes. The state governments keep providing bigger and bigger construction grants, but the number of housing starts keeps falling. Government boffins don’t know why.
Govt incentives won’t work as well as they did as $5K or even $10K or $20K is not going to make that huge DEBT of $500K look any better. The fundamental problem is DEBT and too much of it to own a basic 3BR in the outskirts of Sydney or Melbourne.
Young people will be commiting financial suicide and the banks will have them in chains for the rest of their life.
At the end of the day governments are looking after their own interests and not the peoples, therefore we can all dream they will abolish Negative Gearing and other incentives, but it won’t happen as there are too many vested interests.
@Peter. Agree FHB’s need to start striking and this will see the Ponzi Scheme collapse. The problem is many FHB’s are young and gullible and fall into the trap.
Finally people are starting to speak out, especially against the general institution called government. It is entirely to blame for making the right to afford a decent home a privilege rather than a right for every Australian. I personally cannot see the relevance and justification of voting for anyone as a result and have therefore decided to place a list of my complaints into a ballot box rather than vote for anyone again when these politicians have deliberately failed me on such an important issue. It is so annoying and frustrating the government,bank and real estate conspiracy has been getting away with this for so long and its time to do something united and that is for everyone to continue complaining and DONT BUY NOW!!
Tom doesn’t have to worry. It won’t be long before the major correction now, the global economy is going to crap and evil central bankers are losing the ability to blow air into the massively leaking real estate and stock market bubbles to bail out bank balance sheets. Governments are also broke so they can’t throw any more money to bail out their banking mates either. I reckon its just about game over for for real estate – finally. Anyone who buys now would have to have a low IQ.
@ Macro.
Agreed. Japan has just started the craziest monetary policy yet. After 20+ years of printing money, they have decided to double the monetary base in two years!
Add in a crazy regime trying to make itself look bigger and more powerful than it is.
The USA fed still running QE like a mass production machine.
Europe loosing control of it’s economies.
China’s horrifically unstable economic growth and investment.
And when it all meets here in Australia for the housing asset price falls that are GUARANTEED to happen, the idiot home owners and investor will counter with:
“We got caught in the great depression. If that didn’t happen we would have been rich”
Excuse me, but the great depression (that’s about to occur in 1,2,5,10 years, I don’t know when but it’s like a massive gas leak, at some stage something will ignite it) isn’t directly to blame for your wealth destruction, it was buying a historically poorly performing asset during a massive boom, and using DEBT to finance it. This was never going to have a happy ending.
Agree with all the comments above, but it is very disheartening when it was obvious that we were in a bubble years ago, and the bubble should have popped and would have popped if it were not for all the government interference.
I keep thinking that prices can’t get any higher but then of course the MSM crows every time some new record is set for the highest prices, or when someone pays several hundred or $1 million more than the reserve price.
It’s crazy, but it keeps going on and unfortunately people are still buying and shelling out enormous amounts for a roof over their head.
Average Bloke, (first comment) I’d like to see people marching in the streets and harassing politicians too, but really, will anything change, apart from maybe a bigger FHOG? The problem is that there are too many vested interests. Those who have seen the price of their properties go up by a zillion times, or those who overpaid in the first place certainly don’t want a crash. Investors don’t want to see a crash, nor do developers, real estate agents, banks, mortgage brokers, construction workers, or indeed anyone who benefits from a bubble. And no politician is going to want that sort of blood on their hands. So nothing will be done. We can only hope for some sort of outside force to pop this bubble, like Europe collapsing or a stock market crash or something like that.
just get rid of the girl, easy.
THEO, The Greens have a half-decent housing policy which includes all the concerns mentioned here. One aim is to build affordable Community Land Trust (CLT) villages everywhere for rent and indeed for sale under price covenants allowing price rises linked only to CPI and any capital improvements. You could do worse than vote or network with them.
Still Waiting, the funny thing at the top of a price bubble is that construction starts slowing down, and business becomes very bad for construction workers as work dries up. If housing became more affordable (i.e. land value speculation went away), you would see a lot more building going on.
@Sean – I thought I was the only advocate for The Greens on here. Nice to know I have company.
I love this blog, and I love this country, but like the author of the piece in the SMH, I am also tired – tired of everyone moaning about the election in September and that they “don’t know who to vote for”.
I spend my days talking about Green Party policies and they say “sounds great, but it’s a wasted vote”, or “yeah you’re right, but they’re a bunch of loonies”. Listen to me. I will say this again. We live in a democracy, if you don’t want to vote for the ALP or the coalition, vote for The Greens. It’s NOT a wasted vote. They are NOT a bunch of loonies. Stop reading the mainstream media and being brainwashed into thinking it’s a two-horse race.
The Greens other policies are pretty bloody good too. And I know this much – this country, and indeed the world would be better off with The Greens in power.
Put that in your chillum and smoke it!
The depressing thing is even if you have a few 100k saved up, you’d still need to get a bank loan and become a debt peon to afford anything! Bang there goes the security of having savings. Even with low interest rates the interest on savings is enough to pay a good portion of one’s rent, so why would you buy?
In fact the last time the landlord put the rent up $10/wk, we made him commit to a couple of thousand dollars worth of repairs and a new dishwasher, and we will probably still move just because the location of the place isn’t ideal.
The scariest thing in Australia is not the fact there is a housing bubble of epic proportions. It is that the Australian peoples heads are stuck so far up the proverbial that it is a bubble inside a bubble!. After returning from being out of the country for 12 years and returning to WA I cannot believe the mindset. BUY! BUY! BUY!. I work with guys who’s family income is over 220k and still haven’t any money left for week to week expenses (not that we Aussies live outside our family budgets!) It is like they were brainwashed whilst I was away or something to that effect.
Believe me, this is not going to end well.
Southern WA prices are down 20 to 25% in the holiday areas, check out Peppermint Grove Beach,well less than ten sales in the last year and until recently there were about 80 odd places for sale. In the BOOM STATE! Go to realestate.com and check it out, before they change thier format away from thier current system to hide the data from you. Click on a property and then view free market trends!
Australia needs its own a 5 Star Movement to replace the political system….
The 5 Star Movement’s manifesto is on line. Beppe Grillo is not alone with his ideas. Many other European political parties criticise European politics.
Steve – I hear you, I was also out of the country for 5 years, in Dubai, and when I returned I could not believe the mindset of every single personal I meet. Having returned from one massive real estate and economic implosion, I know what all the signs are, and they are all happening here. Everyone is just too hyped up on this bubble to even listen to any contrary opinion! My most hated question which everyone asks me, is about property… people ask my opinion, and yet when I tell them, they simply cannot stand to listen to me and become quite frustrated if not angry at me, for not validating their own personal opinion of the property market. Now I just refuse to talk about property and refuse to engage in conversation about it.
People regularly ridicule me for renting, as if it’s dead money, when in fact it costs way more in interest to buy a house… is interest not dead money? Plus they are going to be hammered by such price drops, some people will never recover for as long as they live.
It’s important to remember the definition of a bubble… when no one else can see that they are inside a bubble! I heard the same stories in Dubai, ‘oh Dubai is different’, or ‘BUY NOW’ etc etc. All bubbles pop, it’s not a matter of if, but when.
I have seen people who waited for a crash for many years but gave up, and entered in massive debt to buy a house. The felt the pressure from their colleagues, families, or friends and could not hold off. I continue to ‘sit tight and know I’m right’, this bubble will end, and only when the average Joe is talking down property, and saying it is the worst investment and that I should be in stocks or something else… then I will know we have reached the bottom and it is the right time to buy a house 🙂
I agree that this thing has blown out to epic proportions. I don’t think we will truly understand the damage this housing bubble has done to the fabric of society until many years into the future. The fact families are being put on hold, the very thing that preserves the existence of society, all for the sake of propping up property is a symptom of how insane this is.
I kind of don’t blame vendors for being greedy since that’s the country we seem to live in at the moment and I guess some of them are also wanting to buy equally overpriced replacement houses. Bad luck for anyone <40 or starting over in life after a divorce or illness. They (including me) can just pay full marginal tax rates on income and savings to prop up others buying houses from under us subsidised by the same tax system (I've lost count of the (existing) properties I've looked at only to see them turn up immediately for rent upon sale).
More disturbing is the prevalance of the 'harden up princess' comments on that article; not only a good insight into the inability or unwillingness to actually grasp what is happening by a sizeable portion of the population but a pointer to a total lack of empathy by a great many people.
@ Dave.
I know exactly what you mean about not talking about property. I swear I could induce heart attacks and strokes inside 5 minutes with a lot of people. LOL.
If it’s such a good investment:
why aren’t they smuggly keeping the wealth building secret to themselves?
and
Why don’t they pity us uninformed ones who are spending money weekly on ‘dead money’?
Answer: They sub-consciously have doubts about all this property investing. Understandably, many have borrowed MORE than they will ever pay back.
I now have several friends who have either had relationship break downs, family issues, employment issues etc…and the one thing in common? “Once this bloody house is sold I’m never buying again!”
Housing to double every 7 years? Not from this point.
Good video clip.
http://www.youtube.com/watch?feature=player_detailpage&v=9Aur7a44QDY
I think the worst thing about all this is that the government (and I’m sure the Opposition) have absolutely no interest in making housing more affordable, and in fact, will do absolutely anything to maintain this bubble. I see them as the enemy in this whole debacle.
Continuing on from some of the comments here, I’m past my mid-40’s, always rented, never bought. Was the brunt of many a remark from my acquaintances in the past, for not buying. Since 2008/2009, I’m the only one of them that hasn’t asked anyone for money.
@13. Steve, one (ex-)aquaintance (, ex- for very good reasons obvious to this post), was nearly hitting $300K per year. King of the mountain he was. Since 2007, he hasn’t changed his cars, house could do with a lot of spending, income has been cut to about $160K, after taking a mortgage on his $300K income, can’t sell his house, had 7 credit cards in which he just can’t shake the debt off cause by them (I hear its put onto the house payments).
Never thought I’d see the day where stupid people earn over $200K. I say stupid cause they’re broke like a dried twig.
I have always rented, saved (not smart enough for shares, FX, precious metals,…, and don’t trust the (in)competencies of financial advisors).
There is a lot of pain before bedtime going around. Don’t catch it.
Absolutely, house prices are too high in this Country, he has a valid argument in that regard.
However, from reading his article, I sense he may have a much bigger issue to contend with, ‘his girlfriend’.
I bet she’s the type that wants the $40k wedding, kids, new cars, house that they can barely afford! She’s been fed the fairy tale that a knight in shining armor will ride in and give her all these things on a silver platter.
Guess what, you can’t have it all if you are average income earners, you should only be aspiring to an average lifestyle, in other words live within your means.
He needs to man up in this relationship and tell her NO. Otherwise, I predict great challenges ahead for this couple. My advice, be patient, keep saving, researching and really evaluate adding kids to the mix until you are financially and emotionally responsible enough to cope. Or go without them altogether and get a dog instead!
That’s what I did, much less stressful.
I have many friends that have split over the years and many of the men are crippled with CS payments and have lost a big chunk of their assets to the ex’s. You need to consider the bigger picture, not just the immediate future.
I feel that economically, we are headed into uncertain times, not only here in Australia but globally. 🙂