As a young person (25) i feel there is more opportunity than ever to purchase property due to the ultra aggressive lending market offerring up to 106% finance, bad credit/self emplyoed lending options, lower intererst rates, and general healthy property market conditions allowing to leverage a property highly.

Our new inflation figures are good news too as we need our incomes to eventually flow on and increase to enable property to hit its straps in the next cycle. We are seeing rising rents and once it becomes only marginal in terms of renting vs buying, the next cycle will kick on for growth again provided incomes have increased.

With rising construction costs such as concrete and petrol having its flow on effect, replacement cost of property cannot be cheaper than it is today so just like 30 years ago, entering the housing market as soon as possible is still the best option.

Back 30 years ago most households survived off one income, only had 4 banks to borrow from, had higher interest rates to contend with, had dependants at younger ages and had less ability to recieve information on leveraging, investing and wealth creation that we are all bombarded with today.

The times have never been better for young Australians, if we work hard and avoid credit traps such as phones and credit cards (which is the real problem restricting most young Aussies not the nature of the current property market), retirement can be a choice as can financial security for our generation.

Its sad and dissapointing that governments look to discourage wealth creation by creating affordable housing initiatives that discourage aspirations of home ownership. We do not want low quality housing either and we do not want the government to waste its money giving people a hand out and a ticket to requiring government assistance for most of their lives as they have no major asset to assist them, nor the need to aspire for one.

Have a good look at your visions, is it realy in line with what you want to see for the future of Australians?

I agree wholeheartedly, housing prices are beyond the reach of ordinary families, even the rent is becoming too much, it's time for Government intervention to give a "fair go" to the little Aussie battler.

The problem is that for too long the housing market has been used, not just for speculation, but for out-right predation. Schemes like negative-gearing should be abolished. Tax increases on ownership of more than one property where that property is used for income purposes (leaving the holiday shack exempt) need to be introduce.

The ownership of at least a one-bedroom unit should be the right of all citizens. Bricks and mortar should not be viewed as an investment for speculation.

Narcissist,

Thats why many people have nothing, live on the cusp and are only 1 payday away from starvation.

Live for today but you will end up with nothing, you owe it to yourself if there is a method of creating wealth to do so. If you dont, you are choosing your own destiny.

Greed is bad i agree but what if you used your money for good? I would rather be able to give to a cause than merely support one.

Do you realy feel those people who have a go, invest in property to create wealth for their retirement, provide housing for the population and ease the government social security burden should be penalised tax wise? Negative gearing is the reason the government does not have as high a public housing burden, and and lesser social security burden.

What eats at my generation is people like you who WE will have to support when you are past slaving away at your job, as you never got out of your own rode and had a go to better yourself and your family's environment. You will end up costing hard working, tax paying people like myself and many in my generation plenty, perhaps 20-30 years of financial, medical and other government assistance.

Thanks Alot.

Realist,

Ever heard of the term "Zero-Sum Gain". In order for Baby Boomer to make a quid from their real-estate investment, Gen X and Gen Y have to pay. Someone wins, someone loses. Perhaps with all your brights, you might invest in food and make a killing on the way from the wharehouse to the shop. This also could fund your retirement. To me predating/speculating on food makes as much [bad] sense as housing.

Alternatively, OLO Contructions Pty Ltd could build 2-3 million houses or units, flooding the market. This would make housing affordable, but would drastically increase the supply side of the equation and the market, seeking equilibrium, would drive the prices down.

For most people, a house is a place to live. It 10 years ago it cost 3 times an average salary, now it costs 5 times. Apart from the initial cost and repayments it is not speculative - it is not for profit. Those sharks that speculate on the basic of human needs do so for profit at the expense of future generations.

Having bought myself a one bedroom shack, when I was 21, I then bought my first "real" house in 1965.
It cost me 5.2 times my annual salary, which was a little less than average. This was an X housing commission house, so no palace, but a good, well built house. Not much after that I became the only earner for my family. It was not even difficult, & that was without public health, & a lot of other government "service's". In fact it was this lack of government, that made it possible.
You see, I paid only 4.5% interest on my loan, as low government spending kept interest rates low.
I also paid only 7.5% income tax. The same low government spending, kept this down as well.
We were not expected to keep every one in the standard to which we aspired, but we did not have homeless, living in the street.
We paid our own doctors bill, but we could afford to.
Our garbage truck was a cheep truck, with a 6 man crew, not a million dollar truck with one man. Half of those blokes were illiterate, but they earned just as much as me, & were paying off their own houses too.
No one was allowed to chose welfare recipient as a job description.
No, things were not cheeper, but we did not have the huge dead weight of bludgers, our kids are saddled with today.

Hasbeen is absolutely correct. Decent employment conditions (permanency being the key factor), low tax and a loan fixed at a rate for the whole life of the loan, all meant people were able to plan a family and live according to a budget etc without fear of tomorrow.

As for the article, I sat there waiting for the proposals, but didn't see any...where there any offered?

What a farce of and article!Our Labor State Govts with their taxes,levies and regulations have doubled the cost of housing in the last ten years and now have the audacity to blame the Federal Govt for their own excesses.

Remember the home owners warranty debacle that excluded thousands of builders because they didn't have enough assets to afford an insurance which they themselves indemnified with their own assets!Then we have the workers comp debacle whereby payouts were reduced but the employer's premiums were increased to meet the total claim over three years.This is not insurance.

Then we have the safe work place debacle driven by litigious lawyers and gutless Public Servants driven by empire building and fear of litigation.How many busineses have they destroyed in NSW?It is beyond belief.

In NSW workers comp claims for the Public service are three times that of private enterprise.Most were on stress leave.Last financial year the workers comp claims were $672 million.The NSW Govt could have saved $500 million just by instilling some discipline in their workforce.

If you want the reduce the cost of housing,reduce Govt interference,taxes and regulation.The Netherlands is on a crusade to reduce Govt regulation,we seem to be just feeding the monster of bureaucratic incompetence.

We are living in a fools paradise in this country,and when the chickens come home to roost,the reality may beyond our ability to cope.

Hasbeen: Only 7.5% tax? You're killing me here! I can only dream of such things. What I want to know is if we're paying so much tax (and these days, both men and women work, so the tax base is broader), why do we get so little for it?

If politicians want to do one single thing that will ease the burden on the population, it would be to get their snouts out of the trough. They're the biggest bludgers of all.

Also, for people whining about housing costs and running a car in a big city, why not move out to the country? The lifestyle is so much nicer. Frankly, why live in a city like Melbourne or Sydney unless you can take advantage of the good things about those places (eg. live music, art galleries, etc.)? You can't really if you live in the cultural wasteland that is the outer suburbs, so why endure all the bad points of cities (eg. traffic jams) then? The outer suburbs make no sense at all to me, which is why despite growing up in Melbourne and loving that city, I believe it's way past actually being livable, so I'll never buy property there. I fled the place last year and couldn't be happier.

Realist: I agree that credit cards and phones are a major reason for young people struggling, as are all the other consumer goodies and lifestyle choices. I must be one of the few in my generation who still believes if you can't pay cash, you shouldn't buy it.

Good to see the Senator thinks to mention "Peak Oil." And with global oil supply set to decline 32% by 2020 - as this July 11th 2006 Senate document shows - all bets are off . . .

http://www.energybulletin.net/18506.html

Government interference in the housing market to improve affordability won't work; it will cause prices to rise further by increasing demand, so erasing the intended benefit. That's what happened with the first home buyer's grant. Abolishing negative gearing won't work either. Keating tried it in 1985, only to find it created a severe rental property shortage, hurting the very people the policy was supposed to help. The fact that house prices rose so much and so rapidly from 2000, it is inevitable that they will fall. This is already happening here in Sydney, where I don't see prices rising for at least 4 years. As an investment residential property is hopelessly unattractive. To attract a rational investor, either house prices must fall or rents must rise.

There are other options to improve affordability in the long term that actually work:
(1)Abolish stamp duty, which encourages house price inflation as vendors 'pass on' the stamp duty that they originally paid to the purchaser.
(2)Eliminate immigration. As long as migrants continue to come here, there will be less and less land per person. Prices must therefore keep rising. Without immigration and a zero population growth rate, land prices will remain static.

Nothing would blow both feet off the Australian economy, and housing affordability, like zero migration and zero population growth. So the only way to maintain economic growth while taking the unsustainable edge off metropolitan growth and house prices is to implement effective (not fake) decentralisation policies.

The creation of new nodes of economic concentration has only been successful when it is associated with new seats of governance, as in Canberra and Darwin since self government.

Two new regional state capitals in Victoria, NSW, Qld and possibly WA, would concentrate the region's share of government decision makers and head office outlays in their new capitals and become the key economic drivers of those local economies.

And that shift in development pressure would buy the existing State capitals their most scarce and valuable resource, BREATHING SPACE. The pace of change in the existing capitals is such that problems are being locked into place by sequential solutions that are implemented before the earlier problems have been solved. And this ensures that the eventual solutions are multiplying in complexity and cost rather than by simple addition.

It is nothing more than what Bob Carr had been saying for years. It would shift growth to places that can cope with growth without harming the prospects of those in the places that are already too full. Merely shifting it to the edge of town just makes a bigger problem.

The moving finger of life writes our cities large, and having writ, moves on to a fresh page. It is far easier and cheaper to create a sustainable city from scratch than to retrofit sustainable values onto an unsustainable structure.

Hi Perseus,

I agree that zero population growth would slug Australia’s growth, but so what? Why is there this constant obsession with economic growth anyway, which in many cases equates to environmental destruction? Growth can come from other sources, notably improvements in technology. If negative population growth countries like Switzerland, Italy and Japan can do it, why can’t we? Quality is better than quantity.

Zero population growth?Did you know that China considers Australia almost uninhabitated.If not for the US nothing would stop them or India for that matter,who have populations bursting at the seems.

Why buy it,when you ca simply take it?

Robg, zero population growth will not merely reduce economic growth it will produce negative growth. But you are right when you say that growth can come from other sources like technology. And one of those new technologies is improving the way we govern ourselves, including altering the structures of government to deliver better governance, with lower overheads, lower infrastructure costs, lower congestion costs and better quality of life. Thats what new states will do.

Your example of Japan as a country that has done well with zero population growth would have been more credible if they had not spent the entire last decade in a very bad economic slump. And Switzerland has specific niches and is helped in no small part by proximity to markets and banking services for every tin pot dictator that ever raped a third world economy. Don't call that clever and don't call it sustainable and don't propose it as an realistic option for Australia. It aint.

What Perseus says about high immigration driving up population growth and land prices is right.
As demographer Alfred Sorby once said, "The cows in the paddock would like to be fewer than the farmer decides."
Recently private immigration agents team up with solicitors, realtors and various universities touting for foreign students and use the internet to flog Australian land and housing all over the world to the highest bidder. Australia's Foreign Investment Review Board encourages this dubious practice. Property development associations lobby mainly for population growth and subsidies for housing from the public purse. APop, officiated by professional developers, financed the Victorian Population 'Summit', [and then others in other states] (speakers mostly journos posing as experts) with Steve Vizard and Richard Pratt (afficionado of piping every drop of H20 in Australia) to push propaganda for population growth; the HIA constantly touts for higher immigration, along with the Real Estate Institute of Australia, the Royal Society of Engineers and other mutual beneficiaries of infrastructure expansion. Then these same organisations have the hide to pose as concerned community organisations hoping to alleviate the housing crisis that they have lobbied successfully to increase with every year since 1960 or so. Their reps pop up on the boards of charitable institutions, 'advising' them on 'affordable housing'. Said institutions have become so dumbed down that they say nothing; just invest in ... housing.
Menzies yanked housing into the private sector in the early 1960s and turned on the immigration taps at the same time, gradually disbanding public housing and its funding. We have been on the road to hell ever since and the Housing industry, property developers and building materials industries have become shameless addicts to the immigration gravy train. Lately they have been tossed new appetisers in the baby bonuses, proving that our politicians will stop at nothing.

It doesn't have to be like this: Western Europe supplies housing for its citizens as a matter of right.
Check out the submission at
Affordability Enquiry www.pc.gov.au/
inquiry/housing/subs/sub153.pdf

Everyone who discusses housing prices misses the main point.
I know it sounds pompus but its true, I am the only one who realises why house prices are so unmanagble.

I'll let you into the secret;
Quite some time back the feminist lobby pressured the government to force the lending institutions to lend against both husband & wife incomes.

Now what do you think happens in any market, any market at all, when twice as much money is thrown into that market ?

Surprise surprise prices go up to meet the available funds !
Now it is no longer an option for the wives to go to work, it is essential ! After all if you borrow on two incomes you have to pay with two incomes.

The women did not do themselves a favour in pressing for two income borrowing. It is the root cause of late age births and the resultant problems associated with that. It is the cause of Peter Costello's concern over the birth rate, it is the cause of concern over the lack of trained people to run the economy. It is the indirect cause of many of societies problems.

So now you know and don't let the feminists berate me about it as you can see the Empress has no clothes !

Bazz: Of course! So what you're saying is that, in a twist on the old joke, it doesn't matter what sort of watch a husband buys his wife for their anniversary, nor even that there's one on the microwave, because there's one in the bottom right corner of her PC at work!

In a sense you're right (about inflationary pressures), but I don't think society's problems are merely a matter of everyone (but especially women) realising that women need to get back in the kitchens or bedrooms where they "belong". Whether people (men or women) like it or not, those days are all but gone, so it's a moot discussion.

WEll Shorebe, it doesn't matter whether it is polically correct or not.
Thats the way it is and if you don't like get off the planet.

It is a matter of the money available to buy a house.
It could be the wife that borrows the money as she may have a higher income, but so long as they don't borrow on two incomes.
It is no good whinging about how things have changed and women are no longer in the kitchen.
Thats got nothing to do with it.
It is that politically correct attitude that has got couples into this mess. I have seen it in my own family and the problems
with miscarriages and difficulties becoming pregnant are all related to the high cost of houses simply because they had to put off having children till they were in their late 30s.
Now tell me the feminists didn't shoot themselves in the foot.
I am sure they never thought it through or they would have seen the problem as it is so obvious. The banks opposed it but the government over ruled them.

If only one income was available to borrow against then the price of houses would *have* to come down
or they would not be able to sell them.
Interestingly the extra money did not go so much to the builders but mostly to the developers and the government in stamp duty.