I recently did some calculations. Well..to be more accurate, the CBA loan calculator did it.

TYPICAL MORTGAGE.

3 bedroom Brick Veneer, 17 squares. Approx $300,000 if ur lucky. (Melb)

Young Couple, no kids. Each on $650/wk, Total $1300/week.

Renting while saving.

RENT $260/week.
FOOD $200/week.
BILLS $100/week.
TRAVEL $100/week.
SUNDRY $100/week.
TOTAL $760/week

Remaining to save=$540/week =$28,080 per year.

Save for 3 yrs =$84,240

Woops.. during that 3 yrs, the same house now costs $360,000

LOAN time...

Deposit $80,000, balance $280,000

$560/week approx. at 9.25% variable 30 yrs

$1300-560=$740/week left.

They have a child. Wife stops working. No longer 1300=560, but $650-560 leaves $90 a week, for all those things above which added up to $500 a week. (food, travel etc)

And of course..all that is if Interest rates just 'stay put' ....
I've assumed that a car is already paid off in the above... imagine if that was also a burden.

Am I missing something or is it virtually impossible to have a home and a family with chidren these days?

I'd appreciate others versions of how it might be achievable. ("selling drugs" and "accidents to parents to gain early inheritance" is not admissable)

Lateral thinking please. "Extended family help".. "cooperative living"
Any experiences from posters?

I felt the federal government could have done more to save many of the homes of the young couples but they didnt have the heart to buck the system. I think their hearts are really with the financial system not with the common folk.
I might seem over the top here but the Holy Bible says that there is a day coming when we (the one world government citizens/slave classes) work a days wages, for a loaf of bread (or equivalent wheat portion)...Revelation 6:6.
This shows that famine worldwide has become a rather large issue. Even this morning ABC news radio was saying that there are 33 countries with a food crisis going on.
In his book "WHAT WILL BECOME OF AUSTRALIA" 1975 Pastor Jack Burrell speaks of a time, off in the future, when famine is going to be a problem even here.
Not so much a lack of wheat, but a fuel crisis and the farmers couldnt get to their harvest because there was no diesel.
A tip for the future!
Get used to living with less, especially personal wealth accumulation. If you do it will lessen the impact on your heart when times change. If youre in crisis right now today "Seek ye The Lord whilst He maybe found"... Isaiah 55:6. Go to Jesus on the matter. "Everyone who calls on the Name of The Lord Jesus Christ will be saved"...Romans 10:13.

"Am I missing something or is it virtually impossible to have a home and a family with chidren these days?"

Speaking as someone in a remarkably similar position to the one you described — except that my husband and I choose to live in the inner city, and the last time we paid $260 rent was several years ago — the answer is no. You're not missing anything. And yes. It's impossible.

I do have friends who own houses, but they either got in to the property market early (which often included a few years of self-imposed exile in *shudder* the outer suburbs) or someone rich and related to them died. This is despite the fact that I know a disproportionate number of lawyers and general high-achievers. (Although, sadly, I am not among their number.)

On top of that, neither me nor the old man has a conventional worklife. We're both doing what we love, but we're never going to be rich.

Obviously, we've made choices that have affected our ability to buy in, but they're choices that impact directly on our wellbeing. We'd also choose to have kids rather than buy a house.

We have accepted we probably won't own our own house, or at least not for many years. We have some money, but we realise our returns will be greater if we invest it in other ways.

Luckily we love the house we live in and we have a great landlord who wants long-termers. So thank god for that.

Australia has, I believe, on of the highest rates of home ownership in the world. But it's no longer sustainable for *everyone* to indulge in the great Australian dream. It's an area where we need intelligent and inventive policy and someone brave to present some new models to a couple of pretty depressed generations.

I've got NO IDEA how I'll ever own my own home. Got no chance. Even rent is becoming a two income only option. Where to from here?. Homelessness will BOOM in the next few years. Due to medical reasons my missus can't work fulltime, or barely part-time. That makes us a one income household permanently. Ahem.....ummm that's if we EVER get the chance to live together...

There seem to be a number of freely-taken choices that affect your specific situation, Vanilla.

>>my husband and I choose to live in the inner city<<

>>neither me nor the old man has a conventional worklife. We're both doing what we love<<

>>we've made choices that have affected our ability to buy in, but they're choices that impact directly on our wellbeing. We'd also choose to have kids rather than buy a house.<<

>>We have some money, but we realise our returns will be greater if we invest it in other ways.<<

You also refer to:

>>self-imposed exile in *shudder* the outer suburbs<<

These choices appear to me to be well thought-out, and ones that you probably would not be inclined to go back and change.

Given these choices you have made, it is very difficult indeed for any government, of any persuasion, to tailor a housing policy that would fit in with your priorities.

I would hope that they first concern themselves with folk who are unable to make the career choices that you have, who do not insist that they live in inner-city accommodation, who are prepared to make the sacrifice to live for a while in (shudder) the outer suburbs, and who, in general, are willing to make the odd sacrifice here and there.

Not that there is anything at all wrong with your priorities - I know that millions would kill for the ability to adopt them - but it is just a little unrealistic to ask the government to take up the slack for you, in an area that is clearly not high on your list.

In NSW Govt taxes and charges account for the cost of a house/land package.We have to look to decentralisation as a means of taking pressure off land in the cities.This means investing in infrastructure like fast trains as they have in Europe and Japan.

We need a total reform of all our Govts and public services to make them more accountable.There is just too much waste,incompetence and ill planning.How is it possible in this day and age to build a hospital where the ambulances won't fit in the underground car park,doors too narrow to fit beds and wheelchairs,operating rooms too small to fit essential equipment,and sew pipes that try to defy the laws of gravity.

Our whole public administration is joke and shambles,thus things like affordable housing won't happen unless we make them accountable.The Public Service "Yes Minister" fiasco is no longer a joke,the reality is biting very deep.

Look at all the empty front yards in Australia! The owners could put in a few shipping containers, fit them out and rent them if they so desire. That would end the housing affordability crisis within 12 months. So why doesn't this happen? It is time for home ownership to entail some rights to the home owner. Instead, those rights have been taken by Local Government, and the result is what we see today.

Does anyone think that the excesses of Wollongong dont happen elsewhere in Australia? What is needed is a bit of people empowerment.

Dear David,

My dream used to be to live in a Victorian terrace in the inner city.

We ended up in a timber-home in the outer suburbs. My husband's parents helped us out financially with a deposit for the home - as a wedding present.

It took two incomes to keep up with the mortgage payments.

When our family increased - we sold the timber house and ended up in a larger brick-veneer home, but again in the outer-suburbs. We're still paying off the mortgage and because I've had to stop working due to health reasons - money's a bit tight.

What the future holds - who knows - we take things as they come. There's no guarantees these days - you do the best you can, and you cope. We've got friends who will never own their own homes - they've been renting all their lives.

My son and his wife have recently bought an apartment - which they're paying off.
It is in an inner city suburb, and they were extremely lucky to find what they wanted - at a price they could afford.

Perhaps apartments are where the future of home ownership lies?
Real Estate Agents are predicting a fall in the prices of homes and
apartments within the next couple of months as interest rates increase.

Pericles,

Apologies, I made myself very unclear.

In saying "Obviously, we've made choices that have affected our ability to buy in" I meant "buy in to the property market" — that is, I meant to infer all that you have painstakingly cut and pasted. We do, in fact, realise we can't buy where we live because of the choices we've made. The whole "shudder" thing was meant to be self-satire — obviously we sound like the kind of urban elites poncy types, which we're not — well, we're definitely urban and probably poncy, but certainly not elite.

But why, just by the way, do you think other people haven't had the career choices we've had? I certainly never had any particular advantages in education or career options, and neither did my husband. Neither of us come from rich families. Anyone can do what I do, as long as they're prepared to accept their kids aren't going to a private school.

Anyway, that aside, I also gave you the wrong impression that I wanted the government to take up the slack for me. I didn't mean that. I meant that Australian policy makers should look at the long-term renting models that they use in Europe and New York City. These don't discriminate between Aussie battlers or ponces like us — but the reality is for many people, the trauma of not owning a house is compounded by the insecurity of short leases and the relatively few rights renters have. I think we need a radical departure from constantly implementing programs to make home-ownership more affordable, which, frankly, is selling people a pipe dream. But it's a popular pipe dream. There are other alternatives to home ownership and I think we need to explore what they are.

A very topical issue David. SBS's Insight covered this topic only recently and is worth a read:
http://news.sbs.com.au/insight/out_of_reach__audience_comments_543488

Some of the ideas that arose included building cheaper community housing complexes (not slums) with shared access to a larger community garden areas. Another option was to make more land available sold direct to purchaser rather than via a property developer to keep the costs down.

It is certainly difficult for younger people these days who not only have to pay exhorbitant rents while they wait to buy but are probably paying off HECS at the same time.

I don't know what the answer is but it wouldn't hurt to look at cheaper housing in the inner and outer suburbs coupled with efficient public transport options.

One concern is if we start offering higher subsidies or raising the First Home Buyers rate it will only contribute to further rises (using the Ross Gittins argument which has some merit). The push for people to be self-funded in retirement has increased the purchase of investment properties and exacerbated the situation.

Good.. we are off to a useful start here.

I've one question that has been nagging me for a long time.

If the Coalition, which is supposed to be pro the big end of town, has now been relegated to the 'outer political suburbs'.. and Labor.. the workers party... is in... can anyone see sound economic reasons for NOT having a 'Peoples Bank' which offers affordable credit? (besides angry CBA,NAB,ANZ,WP share holders)
1/ Peoples bank.
2/ Freeze or punishment on house price rises.. somehow..for 3 yrs or so...(not an economist so stumbling here)

These things (bank) actually do work. Malaysia has the Bank BumiPutera, and it offers much better credit to all who can show they are not ethnic Chinese or Indian (to summarize it) Ethnic Malays and tribal people are able to use it.

Vanilla.. regarding your 'shudder' about outer suburbs :) ya caynt get much more outer than me.. I'm on the very edge.. but oh how sweet it is, with a buffer zone of tree'd land between me and 'them' and just a couple of minutes from Safeways and even Red Rooster is just over a km away. It's not bad really.

Some have mentioned 'inheritance' as a means of obtaining a home.. and I support this.

How do you all feel about the 'Italian Job'.. or pattern... I think they used to buy some land and a large house, plenty of bedrooms, and the whole extended family would live there, all chipping in, and when the time came for the son or daughter(s) to marry and move, Mum and Dad were able to help them.. presumably.. or.. they might have all stayed together.. a granny flat... some re-tooling of the interior to give privacy.. (does anyone know?)

Yep, I agree, it probably is harder for young couples to afford a home, but by the same token I wonder whether they are prepared to make the same sacrifices that certainly my parents made, and to some extent, I made. My first home was a two bedroom flat right at the end of the main runway at Heathrow and when the aircraft came in to land or take off, it killed conversation completely, but at least it was the first rung on the property ladder. No TV of course or any of the electronic gadgets that people seem to feel essential nowadays. No washing machine, dishwasher or that expensive item called a mobile phone. While I have one now, I can't imagine I have made more that 10 calls in the last three years. I still don't eat out, drink or smoke and my clothes cost about $50 a year from the op shops. I was brought up during world war two when my mother saved every piece of string and every paper bag. They knew the value of things having suffered two world wars and a depression.

When you are brought up under such circumstances, you make every dollar count and when I came to Australia 40 years ago, my wife and I bought a two bedroom weatherboard home that was 11 squares. Unable to afford any furniture except a bed, we sat on the floor to eat.

I believe that to some extent the modern couple have expectations that are too high. I now enjoy the sacrifices that I made in early years and although my income is still below the average wage, I don't owe any money and am able to enjoy a self funded retirement with everything I need. I am astounded by the way things are advertised from music, movies, entertainment, alcohol, cars etc., all of which young people consider absolutely essential for their enjoyment.

To be continued

I was lucky in one respect, being a tradesman in the building industry, I was able to buy my present block of land and build my own house, but then as a self employed person, my income has always been very precarious and never more that $20,000 a year when I was working.

If I could have afforded to have children, I probably would have, but on reflection I think it a blessing that I didn't add to this already overcrowded world as most of the problems that we have, such as shortages of water, food, oil, living space, pollution etc., all boils down to trying to cram too many people onto a finite planet. As David Suzuki so wisely pointed out in OLO on 31st March - "In 1900 the world population stood at 1½ billion and there were only 16 cities with more than a million people. By the year 2000 the world population had quadrupled to 6 billion and over 400 cities with more than a million People" We now live in a world where science and medical research have given us extraordinary benefits compared with even 50 years ago, so is it surprising that we are spoiling it all with overcrowding that raises the cost of everything ?

Nearly every Western government is committed to expansion and subsidising human breeding. I just hope that, to use a financial expression, we don't have a hard landing.

Governments - i.e. taxpayers. - should not be doing anything to assist people own their own homes.

People need to get their priorities right and save.

"Governments - i.e. taxpayers. - should not be doing anything to assist people own their own homes."

Nor should Governments distort a market, and that is precisely what they are doing. The current mess has everything to do with obscure and restrictive development regulations and to a lesser extent mass immigration. It has almost nothing to do with subsidies. We really need to move away from this "blame the victim" mentality.

Shipping containers fitted out and placed in front yards across Australia would end the problem very quickly. This is a problem resultant from people having their rights taken from them. Restore the rights and end the problem.

In my first week in Australia I bought three units on two corner blocks close to the center of the city and I was ready to start my own business but family problems blocked me. 5 years later I divorced, my ex wife took 75% of the value of the three units and a house (of cause the children) and soon she returned with the children to her country. Soon I sold my property and I went overseas to bring my children with me in Australia. This story was not easy, at the end I took my children in Australia but I lost my property. In few days I found work but as sole parent with three children was not easy for me to buy again my own house. When my youngest son entered to University, two years before, I have started to rebuild my life, my first step was to establish my own business without to leave my job. Now I am working in two jobs, 8 days per week, I have to build my own business, and it is not easy! No thoughts for house!

Mr Right... I think ur being a bit harsh there mate.

Consider this.. we are all one big national family.. some do better than others on an individual level...ok.. but why don't we give a leg up to those struggling, through our government? I really believe its pretty much impossible now for a young couple on average wage to have a family and buy a home and a car..
Although I do agree that a strong sense of personal responsibility would make a big difference. If young people would save like crazy as soon as they have a job, they will have a MUCH better chance when they want to marry and have a family.

Government policy is often the cause of the barriers to home buying. So, it is quite appropriate for them to help the most disadvantaged.

Antonios.. sounds like you got the rough end of the stick their mate... hope it works out for you cobber.

BD,

I don't think that I'm being harsh.The current generation is just going through what previous generations did.

Why should losers and wastrels get a "leg up" from taxpayers? A bloke of your age should know that the 'victims', as someone called them, who are doing all the bleating now, belong to a group wanting everything now. Their parents are probably to blame, but that's irrelevant. No government in its right mind will start handing out taxpayer dollars to these people beyond and above the first home buyers allowance - something I never got.

I have two daughters. One is 40, the other 37. The younger one has worked hard, got herself a business, a house, a Jaguar and has just about completed her law studies. The older one has no job, 3 kids by 3 different fathers, and lives in a Housing Trust duplex.

Same background. Same parents. I know what can be done and what won't be done by the mortgage generation.

What do you mean by "Government policy is often the cause of the barriers to home buying"?

Fester, the 'victim' poster, seems to agree that it's the government's fault, but doesn't spell it out, relying, rather, on unsubstantiated 'distorted markets', 'obscure and restricted development regulations'.

Perhaps you can spell out just what the government is supposed to have done? I certainly will not accept the high immigration bit because every time I mention that Austalia's immigration is too high, the same people who now bellyache about the unnaffordability of housing are the first to scream 'racism'.

Give it your best shot. Prove to me why taxpayers like you and me should help the current generation out when we had no help at all, and things were the same, relatively, as they are now.

"The current generation is just going through what previous generations did."

Untrue. Housing has never been less affordable in Australia's history. I can relate stories from my Grandmother growing up in Sydney. Home ownership was not a big deal; not even beyond the tram driver.

"Perhaps you can spell out just what the government is supposed to have done?"

Who controls immigration? Who regulates development? Is the development process a transparent process? How many councils have been sacked because of corruption relating to dealings with developers? The frequency of failure of local government is cause for concern. Enough for a Royal Commission I believe. I would like to see more competition introduced to the market by relaxing some of the restrictions, and by making the development process more transparent.

"I certainly will not accept the high immigration bit because every time I mention that Austalia's immigration is too high, the same people who now bellyache about the unnaffordability of housing are the first to scream 'racism'."

So you find screaming a convincing argument do you?

I didn’t ask for your comments, Fester, but the ones you have offered up prove something to me.

“Untrue. Housing has never been less affordable in Australia's history”, you say. As far as I’m aware, only the media and the housing industry keep this one going. Housing is not ‘affordable’ only to those who want a house, but who will not go without other things to get that house. In your grandmother’s day, people did go without other things to attain something they really wanted. There was no ‘instant gratification’ those days.

As for what governments control. So what? Governments have to control certain areas of everyday life, and there is absolutely no evidence that this control has a bearing on housing affordability; and it is obvious controls have to be in place for the economic good of the country and people who would get themselves into ever more financial trouble without any controls.

What do you comments prove to me? They prove that you and your fellow ‘victims’ like to blame everybody and everything else for your own failings.

Fine, if that’s makes you feel better. Just be aware that you are never going to get what you want simply by believing what you chose to believe

Mr Right,
As Boaz said, I think you are being a bit too tough. I can see good points in both your and Festers argument.

Firstly, home ownership never was easy. Post war many young couples lived in a couple of rooms in a parents house or an addition. Also many, includung migrants, got a block and built a garage and lived in that and built the house as funds became available. Sure people were happy with a modest dwelling but you can't do the same on a block now days. Restrictions mean that blocks are only available fully serviced and they have to have a home constructed in X time. Even on rural blocks the cost of power/ phone and septic can cost large ammounts even before you build. So government regulations make things more difficult these days.

I know that many young people want "it" all at once and many don't want to sacrifice their life style, like we did, to get that. No working couple ever were able to get a house if they dined out a lot, paid for entertainment and recreation or entertained others. It is a matter of priorities. I am astounded at the palacial homes now being built and shudder at the cost of cleaning, heating and cooling. I also recall,post war, there were vast areas of public housing constructed, so Governments did help people to get a roof over their head and some bought the housing commision house.

I have no doubt that high immigration has contributed to an increase in house/land prices. When China was to take over Hong Kong, there was an influx of wealthy business immigrants whom pushed up house prices dramatically in the larger cities and this flowed through.

So I think you both have made some good points and maybe both could be a little more concilitary.

Fester's comments, both the initial ones to the topic, and those in response to Mr Right's assertions seeking to contradict the plain facts established in the opening post, have gone right to the nub of the matter: the role of government. Let all note, it was neither Fester nor B_D who made any request or suggestion as to government or taxpayer assistance being part of any solution: such had only been barely hinted at by Gibo in the context of alleviating the distress of foreclosures in certain circumstances. It was Mr Right that introduced the red herring of general taxpayer-funded assistance into this otherwise most productive and promising discussion.

Note particularly that it was not really B_D who defined unaffordability, but a large and experienced financial institution, the CBA, via the medium of its loan calculator. What B_D did was to show the likely EXTENT to which this objectively determined unaffordability has come to affect the upcoming generation who do not yet own a home.

A mystery exists as to why, in a land of relative plenty, home ownership has never been less affordable.

Fester identified the first half of a complementary key set that can unlock this mystery, when he put the spotlight on government as being the major contributor to the problem. His simple suggestion promises to be an excellent vehicle for demonstrating in specific detail just exactly why and how it is that government is itself the obstacle to a solution.

The second half of the complementary key set is found within B_D's words in his third post to this topic: "but why don't we give a leg up to those struggling, through our government?" It lies in the use of the word 'our'. Its the wrong word. I don't think its any longer correct to regard any tier of government in Australia as 'ours'. Nor do I think that any tier of government any longer really acknowledges any primary obligation to 'us'.

This disconnection is the as yet unnoticed 'elephant in the room' in this discussion.

The price of a house as a proportion of income has risen dramatically since the 50s. Even in the last decade. See here: http://www.cnet.ngo.net.au/index2.php?option=com_content&do_pdf=1&id=32738
and here: http://www.earthsharing.org.au/node/6 (scroll down to Figure 2).

On the other hand, it's true that people no longer want to sacrifice lifestyle in order to own a house. An elderly mate of mine remembers when he and his wife bought their first lounge suite — they already had the beginnings of their large Catholic family, which they packed in to a two-bedroom weatherboard shack. They did without for years.

On the other other hand, older generations could expect to pay off their mortgages within a couple of decades. This is less likely now.

According to that most trustworthy of sources Wikipedia, Australia has the highest rate of home ownership in the world ( http://en.wikipedia.org/wiki/Home_ownership_in_Australia ). I think creative alternatives to home ownership are the missing but vital piece in this jigsaw.

Know I said it before, but, you know, just saying.

BOAZ_David,
If you can trust yourself when all men doubt you,
....
If you can wait and not be tired by waiting,
....
If you can dream--and not make dreams your master,
.....
If neither foes nor loving friends can hurt you;
......
When you set out for Ithaka
Ask that your way be long,
Full of adventure, full of instruction
......

Always keep Ithaka fixed in your mind;
Your arrival there is what you are destined for.
...

And if you find her poor,
Ithaka has not deceived you.
So wise have you become, of such experience,
That already you will have understood
What these Ithakas mean.

Fester's suggestion, should anyone attempt to implement it, would almost immediately show up local government, the restrictor (read 'thief') of existing landowners' rights, as the frustrator of this approach to a solution of the housing affordability problem.

The first thing to note about this suggestion is that the subject shipping container, for practical reasons of handling and positioning, in the vast majority of cases, would have to go into the FRONT yard. The immediate result from this would be a whinge from some unidentified third party, not even necessarily a nearby landowner. "Its unsightly", "these containers will reduce property values", "there will be too much noise from the fitting out operation", "the container blocks my view", "why should x be able to make money from renting a container - this is a residential area", and so on and so forth. Whinge, whinge, whinge.

Of course there would be an element of truth in all these, and undoubtedly other, whinges. If there is one dictum upon which local government unfailingly seems to operate, it is that of 'the whinger must be granted satisfaction'. The idea is probably dead in the water right here, unfortunately, but just on the off-chance that there is no specific prohibition against fitting out and renting containerised accommodation, and a number of landownwers in this LGA were brave enough to face down the whingers and their supporters, how would this idea help make housing more affordable?

In many cases, both the labour, and much of the materials required for the fitting-out, are presently un-, or under-employed. In many cases it would be the intending occupant who would do much of the fitting-out. In many cases the front yard in which the container for the present sits would be that of a parent or relative of the intending occupant. No new land initially needs to be purchased. The job is within easy reach to put to good use spare time. The value of time put in is tax free, not nett remaining after tax.

And containers remain transportable in the future.

Getting the picture?

There's is no 'right' to home ownership. You can afford it, or you cannot.

Governments have always provided housing for people in need, and so they should. But, governments should never, never used taxpayers' money to provide assets for any individual.

Fester has thought laterally, as you asked, B_D.

In a few brief words Fester has thought inside the box, let alone outside the square. He has proposed at least a partial solution that would be within the reach of many individuals or families to implement almost immediately. One of the beauties of this approach is that a shipping container is not a building. It is consequently arguable that it is not a development, either. Should this be sustained, it would seem logical that all of the existing services available to the land on which the container sits would be easily able to be shared by private agreement.

The unproductive passengers in the form of building and development application fees, stamp duties, land transaction costs, loan establishment fees, and so forth would simply have been unloaded. The need to have outlayed money for the purchase of land will have at the least been substantially, maybe even indefinitely, deferred.

The only role of government in this would be that of staying out of the way.

This restored right of the existing homeowner to fit out and have somebody occupy shipping container based accommodation could have another effect: it could result in more, and more appropriate, rental housing becoming available for young families. Some existing homeowners may prefer, due to changed circumstances of life, to occupy the containerised accommodation themselves, and rent out their house. Where the landlord is in nearby residence both the incidence of, and need to guard against, abuse of the premises by tenants tends to be lessened. Greater availability of appropriate rented housing at a time in life when young families most need it will act to reduce upward pressure upon residential values.

The fact that container accommodation may be significantly less expensive than rental of a conventional house adds a presently entirely missing option to the accommodation mix. The availability of this option may amplify considerably downward pressure upon the rental of conventional housing. Competition introduced into an erstwhile captive market.

The bar against entry to both the rental, and the real estate, markets is lowered dramatically.

There is a housing problem, Fester has a very good, very useful idea, his suggestion is an easy good solution for the problem. Forrest Gumpp, agree with Fester's suggestion, (I agree too,) and he try to inject new, creative ideas into this solution. Mr. Right stuck on taxpayers money!! But Fester's idea has nothing to do with taxpayers money, it is an easy, costless, good solution.

Hi team...
well a few of us are uncovering some important dimensions of this..

example (Fester)

Who controls immigration? Who regulates development? Is the development process a transparent process? How many councils have been sacked because of corruption relating to dealings with developers?

Now..thats a negative (but valid) part of Forest's "mystery"

But on the shipping container line of thought.. I think there is value in exploring this. My own preferred approach is to return to 'village' life.. in some ways.. Larger land blocks.. but denser housing.. so extended families can dwell together and have shared ownership or equity.. and mutually support each other through lifes pitfalls and joys.

I fully realize the potential complications of this, and the negative side. But there are equally if not more problems with 'hyper isolationism' of our ultra individualist approach to the nuclear family.

I've seen all the 'bad' of 'village/tribal' life, but there is also so much 'good'...and no matter which way we go, I don't think we can escape this dichotomy of experience. On balance, I think 'togetherness' is better than isolation.

This would inevitably reduce pressure on many current government services.

Why not consider:

a) Larger block sizes
b) Denser housing permissions on such blocks.
c) Less restrictive planning codes which would allow more freedom to enlarge the 'Longhouse' of our families.

The real estate agents would hate it, but hey.. why should we be their slaves?

Banjo, Fester and Vanilla makes some good points.

Housing debt takes up a much higher proportion of our incomes than in previous years and top that off with HECS debts, growing fuel and grocery prices...well you don't have to be an Einstein.

However, I would also add that we have become a much more consumer driven society and our 'wants' sometimes take preference over our 'needs'. Families have on average got smaller but houses have got bigger. I grew up in a house without a family room or an ensuite and this was the norm. My mother (one of five children) grew up in a two bedroom house where the two girls slept in the other bedroom and the boys on a built-on off the back porch. By her account they did not feel underpriveleged.

We now want our plasmas, lounge suites and 'good' furniture NOW rather than wait until we can afford them. I don't think most people consciously think in terms of 'keeping up with the neighbours' but the drive to obtain more and more material possessions is ever growing.

Maybe we are using consumerism to fill another need. We have (for many reasons) lost track of the importance of family connections, our connections with community and while we are all out there working for the growth of the economy our community and 'spiritual' lives are suffering.

(I seem to have gone a bit off topic, but thought it was someway relevant to the total debate.

You may consider yourself to be a little off-topic Pelican, but you have illuminated some important issues in working toward solutions to housing affordability.

You credit Banjo, among others, with having put forward some good ideas, but have you grasped the full significance of this point he made: "Also many, includung migrants, got a block and built a garage and lived in that and built the house as funds became available. Sure people were happy with a modest dwelling but you can't do the same on a block now days. Restrictions mean that blocks are only available fully serviced and they have to have a home constructed in X time."?

It may be that in attributing a substantial part of unaffordability to a seeming unwillingness on the part of many to 'do without', and thereby over-commit themselves by way of debt, you are failing to take into account that the alternatives are in large measure no longer lawfully available in the way they were in former times. Those alternatives are not unavailable because of any genuine shortage: they are unavailable because of governmental restrictions.

Let's face it, if, as a bank, you can vary the interest rate on loans at any time during the term thereof, and at the same time be lending to a market that is effectively prohibited from undertaking smaller borrowings (or shock, horror, even funding progressive building requirements from SAVINGS!), how could you help but do very well in the market? Your customers either borrow for a large up-market house, or they go without owning housing altogether! If an artificial shortage of housing was for one reason or other constantly maintained, you would be pretty well waterproof as a financial institution.

You would note, if you had any familiarity with the costs likely involved in implementing Fester's proposal, that there would, or at least could be, a greatly reduced role for debt as people eased themselves into home ownership by this path of inventiveness, self-discipline (of living in a container), and self-help.

We've had our rights stolen!

Hi Forrest

I didn't intend to suggest that government is absolved of responsibility in the housing affordability due to a heightened level of consumerism and take heed of your comments.

I agree with you that we have lost many of our rights particularly when government seems hellbent in limiting the options available and financial institutions have a vested interest in the status quo.

Forest said:

"Those alternatives are not unavailable because of any genuine shortage: they are unavailable because of governmental restrictions."

Which of course opens up the issue of 'who' determines government/council policy..and with what goals in mind?

I suggest that while some of it involved trying to maintain a semblance of 'order and standard'.. I'll bet that Real Estate agents on councils would prick their ears up very quickly at any motion that could impact on the turn over of property, or reduce the number of prospective property buyers out there.

END GAME.. we might not be there yet, but we are definitely heading towards a time when the 'endemic poor' who have no possibility of ever achieving a 'home'.. will band together and become like those 'landless squatter' movements in South America..
I guess this will always be dynamic..changing up and down...but we need to be aware of it.

ALTERNATIVE. Larger blocks (as previously stated) with extended families, enough land for vegy or a few sheep cultivation, relaxing rules about slaughtering at home, (do I hear the butcher shops screaming 'foul' there?)... I see light.

You've either been a mahout B_D, or worked close to one over an extended period!

You've not only recognised the 'elephant in the room', but started using the right language - "Which of course opens up the issue of 'who' determines government/council policy..and with what goals in mind?".

Its a pity you have cast real estate agents in the role of 'slave owners'. Nobody is forced by law to use them: agencies provide a service to one degree or another, and it remains the seller's choice as to whether that service is worth the fee asked. You could with much more justification have picked on banks, but even there, whilst banks have a seeming vested interest in the now stagnant Australian status quo, nobody is forced by LAW to seek a loan to purchase a home. Not even banks are slave-owners.

The natural tendency to blame 'vested interests' in this home ownership unaffordability problem plays right into the hands of those really in a position to determine government/council policy. It seems natural to think that having a vested interest equates to possession of power and influence, and most people seem to fall for this trap. It in fact works the other way around: if you have a vested interest created or enhanced by force of law, you are not the master, but the servant (slave?) of those who make the relevant law. So each of these 'vested interests' cosies up to 'government', in the belief that doing so secures their position. They delude themselves, but in the process "government' gets an easy ride.

But don't the people determine indirectly, through their selection at elections of the persons and policies on offer, what government policy will be? And can't they change it if enough of them want change?

Only if it is only genuine real eligible people each voting only once in any election. If once there exists a significant (say 5%-20%) batch of 'proxy' votes, you have the recipe for a secret tyranny.

Genuine change can always be negated therein.

Back to B_D's suggestion of 'larger blocks'. Brings to mind an old saying: "invest in land, they ain't makin' any more of it". In its own superficial way that saying is a bit of a worry, inasmuch as you have to ask yourself where these larger blocks are to come from, but, shudder if you must, they exist beyond the outer suburbs, if you must think in metro-centric terms.

They also exist in far greater number very much closer to regional centres and small country towns.

In the majority of cases, these land titles (larger blocks) have very little inherent agricultural, pastoral, industrial or environmental heritage value. Their value, such as it may be, exists in their suitability for one form or another of rural residential use, and the viability of that residential use is very much dependent upon proximity to employment, or the possession of an independent (usually retirement related) income and the attractiveness of such a location to the purchaser. Yet the restrictions upon rural subdivision (owner-subdivision, not developer subdivision) and land use tend to be far more stringent than circumstances would appear to require.

As an example, in NSW it is in many (all?) cases permissible with council approval to construct FREESTANDING 'granny flat' accommodation on a suburban residential block. Yet on non-urban blocks, with perhaps from five to 100 times as much land area available upon which one could build, there is total prohibition upon any such accommodation unless it is INTEGRAL with the (generally only one) dwelling permitted on the land title in question.

Why such intensified restriction? Governmental fear that if once physically built, the logic and argument in favour of a future subdivision of such rural residential land would be irresistible! Why should government fear such an outcome? Inability to justify 'developmental levies' (no additional services are needed), downward pressure upon title prices (affecting stamp duties), but above all showing that residential real estate prices are in large measure what they are because of the maintenance of artificial government-created shortage.

Government's plan? Divide, conquer, enslave!

I have just done some alternative calculations. I have commenced with B_D's assumptions.

Young Couple, no kids. Each on $650/wk, Total $1300/week.

Renting while saving.

RENT $260/week.
FOOD $200/week.
BILLS $100/week.
TRAVEL $100/week.
SUNDRY $100/week.
TOTAL $760/week

Remaining to save=$540/week =$28,080 in the first year.

Renting while saving and fitting-out container accommodation in second year.

RENT $290/week - includes $30/week container site rental for the year.
FOOD $250/week.
BILLS $120/week.
TRAVEL $130/week.
SUNDRY $100/week.
TOTAL $890/week

Remaining to save=$410/week =$21,320 in the second year, plus $850 interest after tax on savings,TOTAL with prior savings $50,250 less container purchase, delivery, and fit-out of $9,000 (which they now own outright) leaving $41,250 in cash.

Living in own fitted-out containerised accommodation, renting site space only, in third year.

RENT $30/week.
FOOD $250/week.
BILLS $120/week.
TRAVEL $130/week.
SUNDRY $200/week.
TOTAL $730/week

Remaining to save=$570/week =$29,640 in the third year, plus $1,700 interest after tax on savings, TOTAL with prior savings $72,590

Now, if only our hypothetical couple were living, in their adapted container, on a site large enough to permit them to position, work on, and fit out another container (or containers), while continuing to enjoy a long term rental arrangement for the site only at advantageous rates. The modularity of these items would permit the relatively far less expensive development of quite acceptable additional living space.

It could even be that, on household income of say, $750 per week, their position might be:

RENT $50/week.
FOOD $150/week.
BILLS $120/week.
TRAVEL $100/week.
SUNDRY $100/week.
TOTAL $520/week

Remaining to save=$230/week =$11,960 in the fourth year. After having spent, say, $22,000 on further container(s) and fit-out, our couple would have savings of around $64,200 and a much larger living space which they own valued at $31,000 minimum.

To be continued.

Forrest

Thank you for making such an effort. The accusations of posters like Mr Right deserve to be exposed for the rubbish that they are, and your efforts have done this. But more importantly they show the economic damage wrought by high housing costs, which can suck the capital out of a community more efficiently than any casino. It is fortunate that the cost of consumables has fallen so greatly with the progress of technology. Housing has only been different for the reasons you outlined.

An interesting radio program today where the guest speaker spoke out against the excessive regulation of housing. I would comment that it would be easier just to increase the urban density.

http://www.abc.net.au/rn/counterpoint/stories/2008/2213115.htm

Thank you for the recognition of the effort, Fester.

I'm inclined to agree with you that it would be easier to just increase the urban density. That, after all, is what your idea of adapted shipping containers in front yards amounts to. The urban areas are where most of the existing employment opportunities are presently located, as well as the utilities and transport infra-structure, let alone such social support structure as may exist, for people like B_D's hypothetical couple.

However, I think it has to be recognised that the relatively constricted living space likely to be provided in adapted shipping containers in suburban front (or for that matter, back) yards is something that those who have to occupy it would like to move on from as soon as finances and other circumstances may permit.

Given that most of those suburban containers are essentially rental accommodation, the widespread adoption of this option would enable prospective occupants to rent/live closer to their work in many cases, rather than necessarily in the *shudder* outer burbs. The availability of vacant land to build upon, or the capacity to buy a house, with this option available is no longer so much an issue as it is presently. Still, you would like to think there was a better, more spacious, future for you if you had to conform your lifestyle to the constraints of containerdom. And it might just be possible for some.

The 'beauty' of the adapted container is that it is transportable: the inventiveness, effort and money that have gone into making it livable belong, in this scenario, to its occupants. If they can find a more spacious site within reach of employment, they can transport their existing livable accommodation to that site, occupy it with minimal delay, and modularly and inventively extend their living space with additional container(s) as money and time permit.

The problem/challenge now is as to how they can obtain secure tenure of ground space, at ground-space only rental rates, for the foreseeable future.

Company, teamwork, and legal smarts are the answers.

continued from above.

I have said enough. I have given all necessary clues to anyone really interested in an at least partial solution to the housing affordability problem.

Suffice it to say that I can see how, based on B_D's assumptions as to incomes, living costs (with some increases), land values, and current taxation and interest rates, this hypothetical couple could be, within four years of starting out, living in around 14 squares of habitable living space on a near-city 2Ha+ rural residential property which, within 10 years of starting out they could effectively own outright.

There has been no role in this suggested (partial) solution for banks as we have come to know them in Australia. This is not to suggest that they could not be of some use in achieving the outcome, simply that they are not essential to that end. I guess that implies that this partial solution to housing affordability will tend to make home-loan borrowing more of a buyers market. My heart bleeds.

There has been no role for government in this scenario, other than that of staying out of the way. To be completely honest, however, 'staying out of the way' will require of government, particularly local government, the total abandonment of the position that 'the whinger must receive satisfaction'. Given that the whole basis of the supposed popularity of planning legislation and the governments that have introduced it rests upon the appeal of the spurious 'rights' of the whinger class to controls over OTHER peoples' land and activities, this is probably a pretty big ask. But I just thought I'd put the spotlight on the real villain, and show the cost that that villain is inflicting on Australian society.

The really sad aspect of all this is that this governmental obstructionism is most likely not supported by a genuine majority of electors at any level.

Should it prove possible to decentralize employment opportunities in Australia from the major metropolitan centres, the transportability of adapted container accommodation can only facilitate the movement of people to match those opportunities.

Interesting article:
http://www.domain.com.au/Public/Article.aspx?id=1194766730150&index=NationalIndex&headline=How%20other%20countries%20deal%20with%20the%20housing%20dilemma

A quote:
In Australia, investment in housing — helped by the tax incentives — is dominated by a small landlord class that is largely unique to this country, and the side effect is the absence of large institutional investors in rental housing. Bigger investors could provide stability of ownership, targeted projects and allow longer-term tenure.

Another quote:
Countries such as Sweden and the Netherlands have up to 40 per cent of their housing stock held in a combination of public and private models. The Dutch and Swedish approaches do not favour ownership over renting, says Burke. "They have a tenure-neutral policy, which is to provide assistance to any tenure that fits their lifestyle, whereas we have been obsessed with home ownership as the one appropriate tenure."

Even tenancy advocates admit that the mood is not right here for a European-style model, yet declining levels of affordability are forcing people into renting for much longer than previous generations.

"We are going to have a lot more Australians living in private rental," says Burke.

"So we are going to have to have a lot more policy shaping for the rental sector."

Vanilla,

I have been feeling a bit guilty for not having thanked you for the links given in your third post in this thread. I always feel a discussion is more likely to be illuminating if relevant links are posted by someone.

The second link in that third post proved particularly illuminating. It is quite a long article, but one sentence in it fairly jumped out and grabbed my attention:

"The cause of poverty is the private monopolisation of land and resources."

If there is one thing that land use planning and regulation across Australia has done in recent decades, it is to monopolise, in the hands of government, land and resources. Upon this monopoly has been built an enormous, costly, inefficient and stultifying bureaucracy that is 'padrone' to featherbedded, privileged, but ultimately dependent satellite 'businesses'. Behold the mechanism of your impoverishment!

I don't claim to have digested anything like all of the content of this link, but it certainly provides some fascinating insights: the reference, for example, to the work "An Irish Commonwealth" published in the first decade of the last century, the very decade that saw the emergence of the Commonwealth of Australia as a superimposition upon already quite adequately functioning self-governing States, a Commonwealth that was only going to cost 5/- (five shillings, five bob, a dollar, 1900 values) per year. Another, to the founding, in 1943, at the height of a war in which Australia's very survival was earlier at stake, of the Land Value Research Group: now THAT was focus upon the long term! Good stuff, Vanilla.

Your fourth post I have linked to from this thread in the technical support area of the Forum: http://forum.onlineopinion.com.au/thread.asp?discussion=1684 . Cross promotion. This thread contains a proposal, that if adopted, might threaten the ability of posters to quite so freely post links as you have. I don't think it has much likelihood of being supported, but its interesting to see how some seem threatened by this feature of OLO. Embedded links in that post were helpful, too.

Forrest

You might like this link showcasing some of the architectural possibilities of shipping containers:

http://www.fabprefab.com/fabfiles/containerbayhome.htm

But whatever people wish to do with their land, the problem is a lack of rights, not a lack of will.