The add on costs don't help either. A retired couple I know are in the process of moving to meet family circumstances and without paying for removalists they are spending $20k in fee's and tax's. The biggest component is the agent's fees and from memory the place was on the market for just over a week. Next up is the state government with a tax which should have been abolished after the GST came in. Lawyers fee's are not trivial.

A couple of those costs can be reduced but for most the alternatives are not good. The most unfair is the stamp duty, at least the other players provide something for their efforts.

R0bert

Some posters seem to think that houses are affordable because people are buying and selling them. Could I suggest to these budding Marie Antoinettes that housing affordability relates to the percentage of the population able to buy their own dwelling. The trend over the past several decades would seem to be a negative one.

Other posters seem to think that negative gearing is making the price of housing higher. I am curious to know what they think would happen to the price of television sets were they subject to negative gearing?

Dear Fester
"housing affordability relates to the percentage of the population able to buy their own dwelling."
You obviously didn't study the article very closely. That is not how the author defined affordabilty; his discussion was based on an article where total household income and house and land prices were used to derive an "affordability" index. It had nothing to do with the percentage of the population able to buy their own dwelling.

"The trend (in the percentage of the population able to buy their own dwelling) over the past several decades would seem to be a negative one"
It would either be negative, positive or no change depending where you did the study. And of course it would also depend on how you defined "able to buy their own dwelling" and your definition of a dwelling!

Well, do you think affordability of housing with a reasonably comfortable lifestyle is getting better or worse. I think it has gotten worse.

For a start, why is it our parents (ie in their prime with growing families in the 1960's to 70's) only paid something like twice the amount of their annual income/salary for their mortgage - and only a sole income needed at that! This was when salaries/incomes were much more balanced throughout the populice, before extreme Capitalism crept in. Today, it is 4 to 8 times the annual wage/salary/income (plus longer working hours) involved needed to pay for a never ending mortgage. Plus, making double household incomes more or less a necessity - no choice anymore! Also, I have read of several statistics from differing sources that say Australia is working the longest hours second to North Korea. I believe this is true.

Runner, yes I agree, consumerism/hedonism is playing along with paying the mortgages. But I believe there are also people that are not particularly taking part in that much and are plainly just struggling. Rents are also becoming increasingly over the top particularly for the average and below average income earner.

Constance,try replacing "before extreme Capitalism crept in" with nimbyism.

The problem is context, Constance.

>>Well, do you think affordability of housing with a reasonably comfortable lifestyle is getting better or worse. I think it has gotten worse. For a start, why is it our parents (ie in their prime with growing families in the 1960's to 70's) only paid something like twice the amount of their annual income/salary for their mortgage<<

By looking at housing as a separate expense, you are ignoring all the other factors. For example, try the same basis of calculation for, say, a television set. Or the weekly grocery bill, on a like-for-like basis.

There is also a point to be made here about cause and effect.

You are looking at the effect...

>>making double household incomes more or less a necessity...<<

Consider for a moment that folk might have elected to create double-income households, thanks to the freedom from domestic drudgery made possible by labour-saving devices in the home, increasing availability of support services such as dry cleaners, grocery home delivery etc.

The increase in household earnings makes it possible to elect to spend more on the acquisition of a good home, but in competition with others who have made the same choice.

So "double incomes" may have been the cause, rather than the effect, of more expensive property.

Just saying.

But underneath it all is the greater ability to choose how to spend our income. And - not entirely surprisingly - it appears that we choose to allocate a greater proportion of it to the home we live in.

What's so bad about that?