Housing Shortage

[spenaroo]

lets not forget the wealth creation that is still  being marketed to people around real estate.

that once you have some capital growth you leverage that to get another loan for an investment.

and use the rental income to pay it off... and then do it again for "infinite wealth"

Air BnB for a higher return...
 

listen to the radio or read the papers and the real estate advise is still pushing this narrative of being a prime time to invest.

real estate is just making money etc...

we don't have Wall St bros here, we have property investor bros.


problem is, you crash this market - and you crash every self funded retiree or mum and dad investor.

Edited October 5, 2023 by spenaroo

[Marty_d]

Bit if you don't crash the market, current and future generations can't afford a home.

It's not going to happen without pain somewhere, that's for sure. Best outcome would be a gentle decline in prices so retirees and investors have time to diversify. 

[spenaroo]

yeah, but they aren't voters in the next election...
they just have to keep it going till then... that's the future government's issue to deal with

personally I think its a Ponzi scheme, and as soon as there is no more buyers its going to topple.

problem is that at the moment there is an absolute glut of buyers. despite the steep price rises we have no choice - we cant be homeless

 

 

Edited October 6, 2023 by spenaroo

[old man emu]

Comment on the stair lift:

 

Or you sell your manor house in the 'burbs and downsize to a house without steps in a retirement village.

[facthunter]

Steps are killers.  I don't fall for them..  IF you have upstairs windows above ground floor ones, put in a water operated lift.  Nev

[Marty_d]

1 hour ago, spenaroo said:

yeah, but they aren't voters in the next election...
they just have to keep it going till then... that's the future government's issue to deal with

personally I think its a Ponzi scheme, and as soon as there is no more buyers its going to topple.

problem is that at the moment there is an absolute glut of buyers. despite the steep price rises we have no choice - we cant be homeless

 

 

Exactly,  so supply needs to outstrip demand for prices to fall.  Which is why I think collaboration is needed between all levels of government to plan new suburbs and towns, release land and build infrastructure.

The federal government can invest in this process as a non profit developer.

 

Realistically I know it's a pipe dream because of bribery, sorry "lobbying", by developers and the inability of anyone to herd the cats in the various levels of government.

Plus of course the LNP and other free market floggers who couldn't bear to see people put ahead of profits. 

[spacesailor]

OR

don't go , two storied. 

Stay at the lowest level , And IF YOU FALL it's only a little further Down .

I fell down & still in pain , but it's liveable. 

spacesailor

 

[willedoo]

The bigger human feedlots have building covenants that tend to create a ghetto of McMansions. The casualties are the people with lower budgets who just want to build a humble home. The land buying options for them are limited.

 

Back in the day in my area, there were a lot of small rural acreage blocks on old historic titles, but most of these have been built on now. Also back then, council was more lenient with family and farm subdivision rules which created new blocks. These days, the council doesn't want ad hoc subdivision of blocks; they want the expansion limited to housing estates. This means the availability of rural residential blocks is dependent on developers doing estates, and there's not enough to keep up with the population increase. Having said that, no amount of rural residential estates will relieve the housing crisis. To cater for the population, the suburbs have to grow and that can sometimes be limited by geography. One town in my area is expanding onto ex pine forest land, so they have a lot of future land to play with. It's fairly poor soil so no loss to agriculture.

[Bruce Tuncks]

I reckon onetrack had it right... Many years ago, the housing trust was there to provide cheap housing to workers. Then the government started to get too cheap to continue this, ( we had a Liberal premier called John Olsen who sold off housing trust houses by the street at 3,000 dollars each.  he did this for strange right-wing political reasons, and I reckoned at the time that the Labor party should have promised to retake them back for the same price when they were next in power. In the event, the Labor party did nothing of the kind, and they gave John Olsen a plumb job or 2 as an honored elder statesman ).

Anyway, I had 2 good mates, one a weapons researcher scientist, who lived in housing trust houses. I personally bought a house for 3,600 dollars before they hit $3000.

Well of course there became a big shortage, and the Govt responded, not by resuming houses, but by making some applicants more "needy " than others. After years of this, you needed to be a single parent on parole with a drug problem to get housed. People lived in fear of their neighbors.

I reckon we need to return to cheap houses for workers, only this time with rules in place to stop right-wing crazies in temporary power from selling them off cheaply.  I would take back the house and give no recompense for pain and suffering, interest etc.

[spacesailor]

STAIRS ! .

People with stairs ' appear ' to stay healthier.  Than sedate people who don't have to get their heart pumping on those stairs. 

Sister inlaw 95 plus , with stairs .

All her male kin are gone , but only a couple of sisters have passed away. Out of 13 .

 

House's 

A thought for those of us getting a little older . house maintenance , should I make the ' recipients of my estate ' help with painting my house gable , OR  shorten my life. , by climbing a ladder to keep doing it myself . Now that is a ' QUESTION '  .

spacesailor

 

[Bruce Tuncks]

Nope spacy, I reckon you should pay to have the job done. IF you have a beneficiary who wants the job, that's great.

If you need to mortgage the place. so be it. Just take out enough for mortgage payments too.

[red750]

A new suburb/city, called Cloverton, is to be created near Kalkallo, on the northern fringe of Melbourne, provided there are no culturally significant reasons. The story in The Age is available behind a paywall.

[spacesailor]

My eldest is always telling me to take out a ' reverse mortgage ' . 

Have a good time , or cruise.  So the house gets sold to repay said mortgage.

BUT

After those. " struggle & strife years " with that false ' recession we had to have ' . ( the banks had a field- day with all the defaulted  mortgages) . We wouldn't get a credit card .

spacesailor

[Jerry_Atrick]

Those reverse mortgages (or known here as equity releases) are basically call off bridge loans. They can be both regular payment or reeceive the full loan amount. The difference is if you take the money oput up front, they interest of the whole amount will be accuring compound interest as they are not receving payment. When you take payments, you are basically increasing the principal of the loan as you go, which reduces interest payable as well.

 

The other better thing about payment rather than full loan drawdown is the max. principal you can finally draw can scale with the value of the house. If the value of the house (or collateral) goes up, you can borrow more; of course, if it reduces, they will reduce the max amoount you can draw.

 

I would imagine they would provide quite a large haircut to the collateral value or leverage ratio they will allow you to draw. The reason is, under both, you are accruing usually daily compound interedt.. That will increase the effective interest rate as they add the interest payable on a daily basis to the principal, and then interest is calculated on that increased principal amount.  If you live a long time,. you may find yourself eviceted from your house if the prices drop markedly, or you live significantly longer than the predicted clog-popping age.

[old man emu]

5 hours ago, Jerry_Atrick said:

That will increase the effective interest rate as they add the interest payable on a daily basis to the principal, and then interest is calculated on that increased principal amount. 

In other words, Banks win - you lose.

[Jerry_Atrick]

it is rare the banks lose. But, they are stumping up cash for no repayment until one sails off into the sunset. No monthly repayments, etc. This means, in theory, the cost of funding for them is higher, too...

 

[Bruce Tuncks]

Well Space, I have to agree that a "reverse mortgage sure would need a guarantee that taking one out would never result in your eviction.

Anyway, there is a neighbor around here who is not ( in my opinion ) a good farmer, but he NEVER borrows money. He knows that borrowing is the only way you can lose the farm. In tough times, he just becomes more self-sufficient and grows more of his own food.

[old man emu]

‘Neither a borrower nor a lender be’

 

Uttered by Polonius, in Act 1 Scene 3 of the Hamlet. He is bidding farewell to his son, Laertes, who is leaving Denmark for France.

 

Willy Wavedagger must have been well aware of carelessness in handling one's finances and espousing thrift. He includes in the same speech:

For loan oft loses both itself and friend,
And borrowing dulls the edge of husbandry.

 

It had several broader meanings in Shakespeare’s time, applying both to animal and farm management an, broadly, implying thrift. The broadest meaning was frequently used by Shakespeare in his plays. The implication of thriftiness would be clear to city dwellers in the same way that city dwellers now would understand the broad meaning of "a country mile".

 

[facthunter]

The "BANKS" push getting credit ahead of SAVING money. Borrowing is the easy part. Desperate people will work harder for less.. Nev

[red750]

My credit rating has dropped, not much, but down. The reason? I don't have a mix of secured and unsecured borrowing. The only debt I have is a credit card under $3000. I have paid off my other card. To restore my credit rating, I would need something like a car loan, but as a pensioner, I can't get a loan, not that I need one.

[Bruce Tuncks]

There was an example of a bank losing in SA about 20 years ago. They had foreclosed on a farm and were selling it to the highest bidder. Unfortunately for the bank, all the bidders were mates of the foreclosed farmer, who got to buy it back real cheap.

Ever try and buy a farm?  They lend you very little of the valuation, quite unlike a city house.

[facthunter]

One of the big differences between the 60's and now is the almost universal desire to acquire things you can't really afford. People then did what is known as "Living within your means".  .  Nev

[old man emu]

30 minutes ago, red750 said:

My credit rating has dropped, not much, but down. The reason? I don't have a mix of secured and unsecured borrowing.

My credit rating must be a few levels lower than a disabled, female Aborigine with a daughter and a substance abuse problem.

 

Quite some years ago my wife and I paid off credit card debt and any loans we had. After that we simply used a debit card for plastic and direct debits for rent, utilities and insurance. We paid rego 6-monthly (only CTP since we got pensioner rego discount). So we had no need to borrow, and didn't want to get burned again with credit card debt. 

 

Now there's just me, living the dream on the pension. It is strange, but I have more money in my active account and more in savings than I've ever had. I don't baulk at spending money in the supermarket. I buy whatever I want from Bunnings or the local hardware store. My car is getting more servicing now than it has for years, and I have just order parts for it and the bike that will total to over $200.  Unfortunately, this untold wealth still is not enough to join RAA and get to go flying.

[red750]

Right on, O.M.E.

 

My credit score was 918 out of 1000, but now is 851.

 

I use a credit card for parking stations which don't accept debit cards, and for online purchases. These debits are repaid each pension day so the balance is less than $1 at statement date. I am paying down the remaining credit card. My electricity, gas and water rates accounts are in credit.

[spacesailor]

GEE GUYS!.

WHATis a credit rating . I have always saved to get anything. 

But

My first car , 250 pounds , when first married . I asked the bank for a lone & was laughed at , told to come back in five years .

I just took my money from them to the " post-office bank .

Then asked the car dealer to hold the car while I saved that ' huge ' amount up , six weeks  and it was ours.

1953 Morris Oxford 1500. 

Never had Hire Purchase or a credit card. 

 

spacesailor

 

Edited October 7, 2023 by spacesailor
A blooody Eye