The National Forum   Donate   Your Account   On Line Opinion   Forum   Blogs   Polling   About   
The Forum - On Line Opinion's article discussion area



Syndicate
RSS/XML


RSS 2.0

Main Articles General

Sign In      Register

The Forum > Article Comments > Busting the boomers > Comments

Busting the boomers : Comments

By Damian Jeffree, published 27/11/2006

Baby boomers may have to give up some of their ill-gotten gains to achieve a more equitable future.

  1. Pages:
  2. Page 1
  3. 2
  4. 3
  5. 4
  6. 5
  7. 6
  8. 7
  9. All
I think this is picking on an easy target when the blame should be shared around. Baby boomers didn't insist on high house prices; I'd suggest easy credit and possibly unsustainable population growth could be factored in. In Europe families seem happy to live in apartments but Australians feel they are entitled to a house on a quarter acre block. Moreover by being unwanted by the full-time work force baby boomers may have difficulty maintaining some semblance of their former lifestyles for the next 30 years or so, not to mention paying increased property rates and taxes. When and if they go into aged care or downsize it is possible the urban housing shortage could ease. Generation X may have accumulated its own wealth by then, a situation apparently not envisaged.

As in other matters the underlying problem is that the economy overreacts to short term influences while neglecting the long term.
Posted by Taswegian, Monday, 27 November 2006 9:25:11 AM
Find out more about this user Recommend this comment for deletion Return to top of page Return to Forum Main Page Copy comment URL to clipboard
Ho Hum, more intergenerational jealousy bunkum.

With the greatest respect to the author, you would have to be naive to believe the politicians and others with a secondary agenda in mind who spread the story that baby boomers are somehow responsible for high house prices.

You could make a better case blaming migrants or people with two incomes - not that they are necessarily to blame either but it does underline the cynical 'blame game’ politics that are used so successfully by some politicians to divert attention away from other issues.

The author wants a return to a low return on houses. Now that is a really silly statement because twenty and more years ago rentals delivered 10% return easily, which made them viable to keep and maintain. However for some years the return has been dropping.

Real estate agents and other urgers claimed that investors could make money from a 7% gross return on rents and then lower, until we arrived at the situation we have to today where investors are getting 2% and lower GROSS without deduction for maintenance and other outgoings.

Owners are effectively supporting tenants' lifestyles while they can get far better returns elsewhere and without the same risk, worry and inconvenience.

Just think for a minute: there are low or negative returns on rent in an environment of increased taxation and government services on housing, escalating government regulation (which increases costs), high insurance premiums and expensive trade services (electricians, plumbers, carpenters and the like). On top of those there have been eight consecutive interest rate hikes.

These are a risky times for the rental industry and a loss of confidence could be catastrophic.

The outcome of what the author is suggesting would be a collapse of the rental market and high rents. Frankly, who does the author think is supplying welfare housing in this country because government has not supplied sufficient welfare housing for decades. The private sector of course!
Posted by Cornflower, Monday, 27 November 2006 9:36:19 AM
Find out more about this user Recommend this comment for deletion Return to top of page Return to Forum Main Page Copy comment URL to clipboard
A thoughtful article. Thanks.

I notice the boomers are already out in force defending their excessive wealth.

Though I don't necessarily agree with all the policy prescriptions (I don't think land release would do much for house prices where it really counts), it's clear that for various reasons, many deliberate government decisions, one group has received a huge windfall at the expense of the following generations.

This cannot last, for reasons of basic economics. Governments will eventually be forced to tax more heavily those who hold most of the assets, simply to arrest a sharp decline in tax receipts as the working population shrinks in proportional terms and the cost of supporting the ballooning ranks of the elderly increases.

No less than the former Reserver Bank governor has warned of "intergenerational conflict" because of this fundamental problem.
Posted by grn, Monday, 27 November 2006 11:33:52 AM
Find out more about this user Recommend this comment for deletion Return to top of page Return to Forum Main Page Copy comment URL to clipboard
Boo Hoo.

My heart doth bleed for the poor little buggers with their IPOds, MMS phones and their whatever attitudes. Guess what? It's the market stupid!

They'd better get used to it, since they're the ones who voted in the lassez-faire, free-market-will-fix-everything John Howard. They want it both ways ? Forget it... whatever...
Posted by Iluvatar, Monday, 27 November 2006 11:36:49 AM
Find out more about this user Recommend this comment for deletion Return to top of page Return to Forum Main Page Copy comment URL to clipboard
Great article Damian.

I see this as a big problem, and I dare say those who don't think it is, probably own a couple of investment properties, and are over 55 years of age.

Cornflower, I assume you are both a boomer, investment property owner, and a highly skilled economist, employed at a top tier investment bank to have formed your opinion on this issue, although I very much doubt the last bit.

My dad bought his first house in the late '60's for $25,000 in Lilyfield. That same house today is worth $600,000+ with most of the increases in value occurring in the last 6 years, which is an insanely unjustifiable increase in anyone's language.

You can't tell me there hasn't been some seriously greedy behaviour on the part of the baby boomers over the last twenty years (not just in housing either), as history shows they're masters of taking what they want at the future's expense.

Take university fees for example. Did the boomers have to pay for Uni? No, but it was they who took free education away from their own children.
How about pensions, Medicare, hospitals, government schools etc? All screwed so the government could hand the boomers a tax reduction, and we could have a $10 billion surplus which it we allow the boomer run government to hide away rather than spend where it's needed, probably to pay for the inevitable boomer retirement shortfall which is a short way down the road. Such a fine example they have provided for those who must follow in their morally dubious footsteps.

From where I sit, the boomers are generally a selfish pack of vultures, screwing this nation/planet for all they can, more often than not so they can send their money to Germany for a new BMW or Merc or a new Persian rug.
Such an entitled bunch of hypocrites, considering many of them were rotten socialist scum in the 60's.

It really is time they got off their high horses, and thought about their kids instead of themselves for a change.

I know, I'm dreaming.
Posted by Stomont, Monday, 27 November 2006 11:41:09 AM
Find out more about this user Recommend this comment for deletion Return to top of page Return to Forum Main Page Copy comment URL to clipboard
With all due respects but having a trader for an investment bank preaching to us on investment ethics is a bit rich. People who are prepared to work hard have more opportunities than ever before to make good money and get into the housing market. In mining towns $80000 per year jobs are going for the unskilled.

In the West thousands of migrants are taking up opportunities and buying houses. I personally had an investment house that made a considerable loss for 10 years (after being trashed while less than a year old by tennants). Even now the rent barely covers repayments and yet I am providing a place for someone else to live.

The author knows to well that taking away tax benefits for those brave enough to invest would only create a bigger rental shortage than we have now. We know the Labour party experimented with this for a very short time only to realise the foolishness of their mistake.

We have been told by Governments of all persuasions that despite paying taxes for decades not to expect a pension in the future. We are encouraged to save and invest. Now we have a trader of shares implying it is somehow immoral unless of course we hire a trader to invest for us.
Posted by runner, Monday, 27 November 2006 11:50:28 AM
Find out more about this user Recommend this comment for deletion Return to top of page Return to Forum Main Page Copy comment URL to clipboard
  1. Pages:
  2. Page 1
  3. 2
  4. 3
  5. 4
  6. 5
  7. 6
  8. 7
  9. All

About Us :: Search :: Discuss :: Feedback :: Legals :: Privacy