There is another explanation on why the Swiss are "better savers" than it being an inherent characteristic of Swiss nationals. I suggest that the reason that Australians have a lot of debt is that Australian financial institutions are "better and more aggressive" lenders.

In Australia banks will lend you money to purchase a house against your income not against the value of the house. That is, banks are able to reduce their risk of lending money for houses by lending against your future earnings in addition to lending against the house. If the house value drops and you have to sell your house for less than your mortgage on the house then you are left with the debt. Stop the ability of banks to take a lien on your salaries if your house value drops and you have to sell and Australian house prices will return to an affordable level.

I don't know about Switzerland but in Australia, mining companies rent land after signing 99 year leases (or a similar time period). Why not have an identical system for home renters? I can't get over the fact that commercial leases in Australia are usually longer than home leases. More 99 leases for home renters would mean less demand on the housing market. But of course, it would mean that Meriton et al would see a fall in profits. And that would be heart-breaking.

The Australian economy has been developed to make home ownership the ideal for all Australians.Count the number of REAL ESTATE AGENCIES in your area.They and the Banks would fight tooth and nail against any move to make us more like the Swiss.Unfortunately "Democracy" as we in Australia know it, is to lobby polititicians to get as much largese for their electorates as they can.Capitalism is fundamentally selfish. True stories abound here of someone buying land for peanuts that 30 years later is worth millions.The redistribution of wealth in the population is a dirty word smacking of communism.We have been taught to value wealth and aspire to own a home as the first step.Is it the best system? Who knows? Who wants to emigrate to Switserland?

i would, except i'm more beach oriented than skiing

Interesting article, but Switzerland with it's population of 7.9 million people is not Australia. so its quite concievable for swiss to be prepared to move to the outskirts of town to buy a house when the largest city, Zurich, has a population of under 400,000 people. Few Sydneysiders will commute from the central coast or western suburbs to Manly for a low paid 5 hour shift.

The Howard government introduced the first home buyer's grant to bolster a flagging building industry and improve employment rates.

Australians see renting as a tempory situation and many landlords will not upgrade their properties beyond a basic standard because who do the tenants think they are. This means that Australians must own the roof over their head by the time they retire or they are in for cold hard shrift. Although financial planners attached to Centrelink in G*ds waiting room have advised widows to rent rather than buy.

I'm sure it has nothing to do with the fact that Switzerland has relatively high rates of land tax, thus encouraging investors to put their money in to buildings instead..

Nope, that couldn't have anything to do with it...

A very large difference between renting in most of Europe as opposed to Australia is that it has always been seen as a choice. It can be a choice because renting does not mean one year leases with three monthly inspections. There are no such thing as house inspections, they would be seen as an infringement on your privacy. After all, the bank manager doesn't inspect his property either, even if he has lend 100% of the mortgage to the home 'owner'.

Rents are long term leases, more often than not for as long as the tenant wants making 30 year tenancies not uncommon. It is seen as your home. Renting as a choice is not an option in Australia

Not only Switzerland has smaller cities. Although Western Europe has a much higher population density than Australia (Switzerland is half the size of Tasmania, think of 16 million people in Tassie!) towns and cities are much smaller. There is more thought to long term town planning than happens in this country where land development and house building is such a big part of our own peculiar personal wealth creation.

As I understand it, in Germany, tenants will upgrade their rented apartment, repainting, fitting new kitchens etc. I believe they can remove the kitchen when they leave. Tenants assume they have a 30 year lease.
A swiss miss of my acquaintance was shocked at the impermanence of Australia. Her husbands family had lived in the same farmhouse for 600 years and often Australian homes are falling down after 50 years. Australian buildings appear to be designed for a 25 year life.
Contrast the swiss attitude with a typical Australian attitude to housing. My mother was relieved when the house she had reared her children in was bulldozed for a new development. It was our house and no one else's. Typically a house was built for or by a young couple and when the last one died the house was falling down, ready for the next family to build a new house on the land.

Billie, yup Swiss homes are much better built then the old Aussie
3 by 1 fibro, alone due to the building codes and the history of
both countries. Houses there need a structure to protect from
atomic explosions, food reserves in cellars etc, all windows double
and triple glazed to keep the cold out and much more. Houses are
just unaffordable for most and living in units is normal, not in
houses.

OTOH, due to the savings habits and tax structure, people save
far more, so interest rates are far lower, which mean much better
houses per investment Dollar. Aussies remain the world's biggest
gamblers but among the world's worst savers, again due to our
tax structure. So we pay higher interest rates then we need to,
which makes housing less affordable. The Swiss have a real shortage
of land, we don't.

Things are changing here. Lots of new homes built in WA are now
fairly solid double brick, rather then the old el cheapo fibro, so
should last along time, as long as no tenants trash them completely.

Australians are not good savers? Surely our 9% super contributions, our large mortgages are savings? Isn't the problem more on how we spend our money not on the savings and what our banks are more ready to lend for?

The problem is more with an economic system that rewards the lenders for consumption rather than rewards lenders for investment. It is more profitable for a lender to lend to someone for credit card purchases (consumption) than it is to lend money to build a factory that has a return in five years time (investment).

Instead of "blaming" consumers we should take a closer look at an economic system that encourages individual consumption to the detriment of infrastructure and productive investment.

The is definite benefits to living within your means. The housing unaffordability is a function of the state governments tying up land release or large private land parcels being able to be subdivided

FP, yup the super levy has made a huge difference, although it has
also made some of our export industries less competitive.

Put it this way, if during the last weekend, Aussies had only blown
26 billion on Xmas, rather then 36 billion, longer term, would
people not be better off? Less credit cards to pay off etc.

If you look at our trade balance, its no so bad, its the current account
that is high by international standards. If we saved more,
that would be lower, which would bring down interest rates, as we
would be less dependant on foreign investors.

To compare interest rates at present on the 3 month rate
from last weeks Economist:

Singapore 2.56%
Canada 3.86
EU area 4.88
Switzerland 2.78
Japan 0.73
Australia 7.35%

That hits mortgages in a big way.

You are correct, one can't just blame consumers. Govts don't provide
incentives to save, they mainly just tax them, so people only
save where its tax effective, like buying houses or super.

Billie said:

"A swiss miss of my acquaintance was shocked at the impermanence of Australia. Her husbands family had lived in the same farmhouse for 600 years and often Australian homes are falling down after 50 years. Australian buildings appear to be designed for a 25 year life."

One of the biggest reasons is termites. In Europe there are less than 10 species of termites, whereas in Australia there are at least 360 described species. In Europe it is not uncommon to see wooden buildings over half a millenium old. It is largely because they are not devoured by insects so quickly..

So, while the Swiss do have high standards when it comes to building, it is not the only reason why their buildings last and ours do not..

Where I live in Sydney there are 19th century terraces and federation era homes that are as strong as the day they were built.
Built with pride, in double brick with high moulded ceilings, iron lace, leadlight windows, they were adapted to the location & built to last. Comparable places exist elsewhere in Australia. They weren't merely the preseve of the rich, they were commonplace & they still are to some extent.

Many of the homes built in the last 50 years have a use-by-date because they are rapidly assembled, semi pre-fab, generic, gyprock & aluminium tack (with or without termites).
.

The build-em-quick technolgy prevailed, quality & standards declined.
The social & commercial priorities have shifted, Buildings were better when the housing industry adapted itself to the community's requirements. Currently the reverse is somewhat the case.

As 'TINMAN' said earlier:
"They and the Banks would fight tooth and nail against any move to make us more like the Swiss"
They already have.

Previous generations made homes that were built to last indefinitely & there is no material reason why we can't.
_________________________________________________

What's more the First Home Buyer's Grant is a tiny fraction of the increase in the median house-price since 2000 (when the grant was introduced).
There are far greater "demand swelling incentives" in our system & they don't serve the interests of first-home buyers