A local real estate agent rings me every couple of months asking if I am willing to sell my house. So far he's tried the 'look how much you could get' strategy, 'the market is moving, you don’t want to miss out’ strategy and telling me he could help me buy another house if I did sell; to which my response was something like 'and you get two commissions — how does that help me’. He has now accepted that I'm not one of those people that move every few years to 'climb the real estate ladder'. Although he persists in still ringing me regularly to check that I haven't changed my mind.
The real estate agent's actions are logical — his business is the sale of properties on which he receives a percentage of the purchase price — so he's eager for the price of houses in my area to go up. Clearly the 'look how much your house is worth now' sales pitch works, otherwise the agent would be changing the sales patter to something that did work or be out of business.
While the sale and purchase price numbers may be ridiculously high to those who have lived in the one house for decades, the reality is if I was to take up the real estate agent’s suggestion of selling and buying again, I would be doing so in the same market, so the cost difference is relative to the amount of equity I have in the current house. Unfortunately, this isn't the case to the person entering the housing market for the first time. Politicians also have used the property feeding frenzy to their benefit, claiming at election after election that they will ensure property prices keep rising, interest rates (a loan is necessary for many property 'investment strategies') will stay lower and there will be nothing done to alter the favourable taxation treatment given to rental property owners.
Australia has an unholy obsession with property. Effectively a house is somewhere for people to live. It shouldn't solely be part of an investment strategy that shows regular growth and numerous tax advantages paid for in a large part by those who are forced to rent the property in an environment where they can't afford to buy their own home. Our housing prices are some of the most expensive in the world.
That's not to say there isn't a need for rental properties; it is also a reasonable expectation for the rental property to be a healthy environment at a reasonable value and maintenance is attended to in a prompt and efficient manner. Sadly, that isn’t always the reality. Obviously, private investors generally will not happily make a loss on a property unless it is to make a 'tax loss'. Even then, the tax loss has to fit a reasonably narrow definition as dictated by The Australian Taxation Office. Yet there are articles in the media on a regular basis discussing the ill-fortune of those that can't afford the rent, so they are living in their car, on someone's couch or have to relocate to find something affordable
There are demonstrated benefits to having a 'permanent home'. If someone has a 'permanent address', there is a greater chance of any underlying health, mental or social issues being addressed. It makes sense really, if the formerly homeless person doesn't have to expend physical and mental energy in locating a bed for the night, there is a better chance for them to connect and retain engagement with support services. Employers are also more likely to employ people with a 'permanent address'. Academic research supports the concept
The problem is that if you have no or minimal income, it is difficult if not impossible to be able to afford a rental property. Anglicare complete an annual rental Affordability Snapshot across Australia
Out of 45,992 listings, we found just eight rentals (0 percent) that were affordable for a single person on the JobSeeker payment. There was one listing (0 percent) in a share house that was affordable for a young person on Youth Allowance anywhere in the country. The most generous income support payment is the Age Pension. Yet for a couple living on the Age Pension, just 1.4 percent of rentals were affordable. Finding an affordable rental is even harder for single aged pensioners, with 0.1 percent of listings left to compete for. Many are rooms in share houses that might not be appropriate for an older person.
Working people are hardly better off. A single person working full-time on the minimum wage will find that 1.6 percent of rentals are affordable. Of all the households featured in this Snapshot, families with two parents each earning a minimum wage stand the best chance of finding an affordable home. Even they will only be able to afford 15.3 percent of the rentals we surveyed.
For better or worse, while the federal government has a seat at the table when interest rates and investment strategies are being discussed, social housing is a primary responsibility for state governments. There seems to be little interest in working across the three levels of government to produce any sort of solution, let alone an acceptable one where there is very few if anyone that doesn’t have a suitable roof over their head tonight or any other night.
This month Queensland is convening a forum
to discuss how to build the 10,000 additional social homes that are claimed to be needed in the state. The next problem will be getting the materials for the homes as well as overcoming the negative perception of social housing in areas where there is a demand, but no supply.
It’s all very well to continue to expect that property prices will continue to rise far in excess of personal incomes and it’s nice to know that the decision you made to buy some years ago has paid off. However, for those that don’t have a property, the future is looking increasingly dire.
While housing summits and intentions to build 10,000 homes are worthwhile, the Albanese Government could do more in lifting the rental assistance component of various social security payments to a meaningful level so that people can afford to put a roof over their heads and stay there for a reasonable period. All levels of government do also have the right and ability to ‘encourage’ landlords not to choose to either leave their investment properties vacant or only available for short term rentals through strategic taxation levies and so on. Superannuation funds can choose to invest into social housing providers such as BHC
rather than fossil fuel or gambling companies.
After all, if a person has a guarantee of a roof over their head for the foreseeable future, they can put some effort into finding appropriate healthcare, employment and social services so they can contribute on a meaningful level to society. A society that looks after those that are less well-off is a society that looks after everyone.
What do you think?