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The Forum > Article Comments > Home-buyers have laid enough golden eggs for government > Comments

Home-buyers have laid enough golden eggs for government : Comments

By Elizabeth Crouch, published 4/1/2006

Elizabeth Crouch argues the new five-star energy rating will mean a bigger and unnecessary financial imposte on home buyers

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Why not blame it on the real problem investor's rather then home buyers drive up house prices, negative grearing rules are the main reason. Another thing that Governments need to do is stop the urban rush. I live in a small country town my wife and I are both working in white collar jobs with a household income of 150K+ we paid 80K for our double brick three bedroom home on a full 1/4 acre block. I don't understand why people want to live in big cities for, maddness.
Posted by Kenny, Wednesday, 4 January 2006 10:05:52 AM
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Kenny, the problem is that while many people I'm sure would love to live in regional areas, there are not enough jobs. In fact, Centrelink will penalise you if you move from cities to country areas - even when it's blatantly obvious you can't afford to live in Sydney or Melbourne.

Elizabeth Crouch blames compliance with government regulation as the main problem affecting housing prices. I would have identified lack of space and the influx of people into the cities as the main problems. And say you abolished stamp duty tomorrow. My guess is that the price of houses would quickly rise to accommodate that change. Just as the home owners grant inflated the price of housing.

Relaxing the rules the housing industry has to follow, such as energy ratings, is tinkering around the edges of the housing crisis. As long as there is no comprehensive national affordable housing strategy we'll see more of the same.
Posted by DavidJS, Wednesday, 4 January 2006 10:33:46 AM
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Energy ratings are a great way to force budget builders to make adequate insulation allowances, just to name one advantage.

What about livability and a reduction in air conditioning needs? it wont be the pin that pops anything, it is a standard which must be reached to avoid building "glorified housing comission properties with no quality of living".

At the end of a property boom its no wonder affordibility is low, but the time factor will ensure the property market will kick on from 2009.

The government will bring incentives out when it is time to kickstart the market again, and this combined with easier finance availability & criteria year by year, and increasing in building costs, housing standards and land supply and demand will ensure life goes on as it always has.

The industry gets a shot in the arm as required. Home buyers with easier finance options, the changing nature of equity use by parents to help children and rising wages over time is one reason why first home buyers will continue to endevour to purchase. Its just that now, it will more likely be smaller dwellings.

Property is a physical need. Migration and lowering household occupancy ensures dwellings will need to be built regardless, and home ownership is seen as the key fundamental for Australians.

Doom and gloom for this industry is a long way off. The increasing number of people who use property as an investment & wealth vehicle will also mean the proportionate demand will improve.

All is good, get into property with future or value add potential now in this market, and when the growth begins, ride the crest of the wave and use your equity. Insulation and rainwater tanks are important, but not to those who dont have to live there.
Posted by Realist, Wednesday, 4 January 2006 12:18:56 PM
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Hey David,

I don't think Elizabeth is laying the blame at governmnet's feet simply due to the latest energy ratings. Rather she is highlighting what other authorities etc are saying. That is that the extra cost actually achieves little but does push housing further out of reach or breaks families budgets forcing them out of home ownership.

It's just another ill conceived government attempt at fixing a problem. Clearly done by a committee as the change has all the hallmarks of committee planning. Being focus on minor issues and pass legislation to satisfy a small but loud section of the community to the cost of the majority.

There is one major effect which will come from another direction in regards to housing affordability and the ability to continue meeting mortgage demands.

That is bank fees (including all financial institutuions). These fees have grown by an average of more than 10% per annum since 1998 according to the RBA Bulletins. They cover fees annually with last years report stating that over $10 billion was collected by such organisations as fees. For nothing.

Most people will get angry when they hear about bank fees but they do little about it. Some of us change banks and habits to try and avoid them but the majority do not or cannot. Last years RBA Bulletin stated that the margin made by banks last year is not quite the same as th high interest rate days ( 17% etc ). But closing fast.

We have had a few small interest rate rises in the last year ( 2 from memory ) and fortunately no more as yet. But it will come, and soon. Ask yourself how people will pay increased mortgages plus the fees which banks have used to replace the income they lost out on when interest rates dropped.

In my view our current governments are totally absent when it comes to looking forward as they have all sat on their hands as bank fees have climbed so high. Don't expect banks to drop their fees when rates go up. They haven't so far.
Posted by RobbyH, Wednesday, 4 January 2006 3:05:55 PM
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Rates will not go up like forecast, The deregulated banking system and the sensitive current environment will mean a large increase wil not be risked, as the ripple effect on the economy is too much.

Its not doom and gloom for first home buyers. the only problem this day and age is that 80% of people under 25 have credit black marks, due to the rise in credit and the consumer society.

The government will not break all the masses, perhaps a few on the cusp, but as a whole we can bear the cost of any rises, albeit small ones.

Good point on bank fees, but there are so many agressive lenders out there that this will be one of the next items being discounted.
Posted by Realist, Wednesday, 4 January 2006 3:12:27 PM
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Realist & Kenny,
Realist I certainly hope you are correct, because I have friends who, with 3 children are unable to even think about home ownership, because of cost, and the families low income.

Kenny I live on the coast in North Queensland, in Townsville population 230,000 and I can tell you that in 3 decades our population has doubled, in other words, the people who have come here for the parafise that used to exist have found themselves living in a similar environment to the one they left behind. I would love to live in a smaller city or town with hopefully a more relaxed pace, and better quality of life. The income is unimportant to me, as I don't have a mortage, you are missing absolutely nothing by living where you do, except "toooo much choice"
Posted by SHONGA, Wednesday, 4 January 2006 3:24:01 PM
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