Inner-Sydney based transsexual, indigent outcast progeny of merchant family and michael_in_adelaide, i agree 100%.

I am a gen y with no wealthy parents and personally i already question "why am i turning the cogs for some rich money counter to go on a holiday when i cannot?" scarily i hear very similiar perceptions amongst the under middle class Australians (the majority). I never understodd why an individual needed more than 3 investment properties.

And to Sibba, the reason why you see people buying homes is because they are the specific minority in this country who can afford to splash their cash around helping to keep the market climbing or who are very very stupid and bought in a point where the words " Australia's property market severely unaffordable" has been used many many times by all. Even Glenn Stevens spat it out on a microphone. (alarm bells.

Overall i believe the biggest cost will not be property itself but of social dysfunction and unrest.

Housing is NOT unaffordable, otherwise no houses would be bought or sold. People without a roof over their head just have to afford. Housing is BECOMING unaffordable. There are two fairly obvious major reasons for this: (1) Artificial shortage of building land/blocks at an affordable/reasonable price. (2) Due to uncontrolled wage escalation/skilled labour shortage building costs are becoming unaffordable/unreasonable.
If governments had the will these major reasons could be overcome:
(1)By governments entering the land development business, developing large tracts of crown land for housing and sale at development cost price, by forced take over of vacant building land and again developing for housing purposes and sale at prices to cover development costs. Adequate public transport to be also developed to provide reasonable access to these land developments.
(2) Factories be established(privately run or government) to manufacture on a production line basis steel framed houses of various designs and sizes. These prefabricated steel frames could then be easily be erected upon concrete raft foundations complete with CI roofs. This mass production of the steel frame and roof covering must reduce considerably present housing costs, also enabling the erection by semi-skilled labour easily trained.
Present day Australian housing is light years behind other countries in modern building methods, is extremely labour intensive and as a consequence extremely costly.
Australian governments are obsessed by employment figures, obviously favouring labour intensive industries such as the present outdated building industry and, for exactly the same reason, supporting migration with its incessant demand for housing and services.
With increased affordable housing must come affordable sufficient public transport preferably light electric railway sytems. Only progressive governments with a will can provide affordable housing in the numbers required. It is possible, it is achieveable, but will it happen?

Are all the people you see at restaurants and pubs milking the public trough? Surely that many people can't be public servants. It seems strange that people can drink, eat like kings and gamble and yet can't afford housing. Maybe if everyone did not have to have a 4 by 2 with aircon then housing might be a little more affordable. I lived in a bus in a caravan park and did something called save in order to purchase my first modest house on a modest income. Today expectations are to high because parents spoil their children from day one. For most housing is affordable if you are prepared to work hard and save. Look at how the Italians did it when they came here. Unfortunately credit cards, mobile phones and lack of self control put home ownership out of reach to many would be home buyers.

michael_in_adelaide, ; If you stopped population growth and abolished negative gearing you would see prices fall rapidly and the housing crisis would be solved.

Truth is, if you take away the incentives to invest, investors will simply invest elswhere, not the property market and the 'renters' will have nowhere to live.

BTW, a large majority of rental properties are 'posatively geared' as they were purchased a few years back. NG has little effect here.

Now if you can't afford a house with below 5% interest and $21K gifted to you, I doubt you ever will so your best bet is to hope that the government doesn't drive investors out of the market hey!

Mind you, you had best brace yourselves as rents will skyrocket if owners get lumped with huge bills for services. Renters may even have to pay for services themselves hey!

elroy,
Do you have any of the following. Modern mobile phone, by that I mean one which you use to cheack emails and brose on the net, LCD or plasma, anything on an interest free period, a nice neat car on hock, etc etc.

Now if you answer yes to any of these then you may well be able to afford a house, but you can't have it all.

We also have what I call a 'spending crisis'. Many gen-Y's take home $800+ a week and blow the lot!

Change your spending habbits and you may well be amassed by what you can achieve.

I have two gen-y's myself.
runner
Well said, sorry I wrote my piece before I saw yours.

This article is, not to put too fine a point on it, a crock.

Its baseline is a survey - the 5th Annual Demographia International Housing Affordability Survey.

This document is flawed, in so many different ways, it is difficult to know where to start.

As a "survey", it has about as much value as the guy next to you on the train burbling on about how much more affordable his glass of beer was, back in 1955.

Starting with the very first table - the "Affordabilty" index.

Nowhere - absolutely nowhere - in the "survey" is there a clue how the authors arrive at their gradations of affordability, which they make so much of in the rest of the document.

It is a nonsense descriptor.

Affordability is measured by whether people are able to buy. Which they clearly are.

All the "survey" data shows is the percentage of income people are happy to allocate to a home of their choice. And - amazingly - they appear to be prepared to sacrifice a larger percentage in order to live in a place that they, for whatever reason, value more highly than another.

What a truly revolutionary concept. People choosing where to spend their hard-earned money.

This "survey" (I'm sorry, I can't seriously leave out the quotation marks) is absolutely worthless. As is the article based upon it.

People buy and sell houses every day. Which should be enough to end all discussion on affordability, right there. Because, patently, the houses in question are affordable.

It really doesn't get much simpler than that.

Affordability is measured by whether people are able to buy. Which they clearly are.
Yeah, Pericles the more they have the more they can buy, but at whose cost ?
Investment property is one of the major problems impacting on our society. It simply needs to be abolished. No-one needs more than one house to live in. If anyone wants to make money don't do it by depriving the next generation from affording a place to live.
An aquaintant proudly proclaims that he has three properties & yet he lives in employer provided accommodation & whinces at the cost of paying another tradesperson to work on his properties. Great patriotic australian citizens indeed such people.