I can't buy one...where will I come up with that kind of money? And I sure as hell don't intend to get into that sort of debt. Ever. So there you go.

Pericles: Actually, we don't live in a market economy. Government has an impact upon housing prices in (at least) two ways, so our system could be described as quasi-market or quasi-command, depending upon your preference.

The first is through land distribution. Present state governments don't just release land for development in accordance with demand. They are actively trying to stop urban sprawl. This means that supply stays the same (or goes down), despite demand increasing.

Secondly, government provides subsidies to some people on the one hand (eg. First Home Buyer's Grant) and adds a tax to property transactions (Stamp Duty) on the other hand.

It is a fine distinction, shorbe.

>>Actually, we don't live in a market economy. Government has an impact upon housing prices in (at least) two ways, so our system could be described as quasi-market or quasi-command, depending upon your preference<<

Supply and demand exist in every market, and are both taken care of, simultaneously, at the point of sale.

The government taxes heaps of stuff, including petrol; is this also evidence of market manipulation?

Taking supply, limited or not, and taxes into consideration are everyday aspects of our lives, and have absolutely nothing to do with the concept of affordability. When we buy booze, it is because we can afford it, not because we are happy with the taxation system. When we buy a house, it is the same deal - it comes on the market, we look in our pocket or chat to our bank manager, and we buy it.

Or we don't.

OPEC deliberately manipulates oil supplies as a matter of course, routinely and directly affecting gasoline prices. We might consciously limit our use of the car as a response to this - possibly also reacting to the government taking a good whack out of every dollar we pay at the pump - but it will take a good while before we sell the car.

Petrol therefore, by definition, remains affordable despite any restrictions on supply, and any government taxation.

"Housing affordability" is nothing more than a meaningless catchphrase, like "justice for workers" or "the end is nigh". The reality is that while people still buy them, they are affordable.

It is actually more specific even than that. We will actually be able to tell the exact minute when housing becomes unaffordable.

People will stop buying them.

My kids have started buying their own homes.

My elder daughter aged 26 is looking to buy her second house (investment property) (she bought her first at aged 21). She has decided the new one will be relatively new and a mortgagee sale (she is not going to live in it after all). She asked me what I felt and I said "so long as you presently have $200 / week free to fund the mortgage shortfall (negative gearing value before tax allowance) you will be ok" - she said - "sure she could do that".

I will help her cross collateralise her existing property. She has sufficient equity to ensure the entire buying cost will end up being covered 100%.

She works a regular job, just been promoted so has the extra cash coming in and can afford her second property - talking about how no one can afford real estate really is a no brainier.

Whether people decide to buy or not depends on their degree of commitment to ownership of property and how far forward they plan / dream / visualise.

The whole thing about changes in housing affordability is a crock. Affordability is always around 30% of gross joint annual income +/- 3% gross joint annual income due to timing lags.

Prices went up in the 1990s because interest rates fell. Prices have gone down in the past 3 years because interest rates have risen but incomes have increased so that has put an offset pressure on house prices not to drop in 100% full response to interest rate rises.

My younger daughter is saving currently and will hopefully be in the house-owner market within another year too. She and her partner are less disciplined at budgeting so she will be slower off the mark.

Col: Oh no, you can't tell that story, not with that moral anyway! That would destroy the myth of the little, Aussie battler being very hard done-by. We can't have that at OLO.