Not sure I agree with the title that no one can ”escape” it. I think the wealth hoarding class does very nicely out of everyone else's misery. Perhaps if things don't turn around their grand children might go from owning the whole country to facing a guillotine.
More likely once there is a large enough percentage of people who will have no hope of owning, then they will start to have an effect at the polling booth.
The problem is that if you own a home and you’ve paid off the mortgage or paid it down over 20 years already then there’s no reason to sell, meaning prices likely won’t fall that much as people will prefer to sit on their asset than to sell at a loss, or at a perceived loss relative to what they were previously told the market would pay for it.
The only mechanism for prices to actually return to earth and make housing affordable again is wage growth and inflation, and the hope that housing prices don’t simply rise alongside wage growth. The only way out of this catastrophe is for inflation to reduce the value of money while house prices remain static in nominal terms. And even the “left” government of Australia see “tackling inflation” and “constraining wage growth to prevent inflation” as critical policy priorities.
Inflation driven by wage growth is actually the medicine needed. But this would hurt the already very wealthy minority so the cure is verboten and branded economic heresy by technocrats and the spineless neoliberals serving the interests of the wealthy that dare to call themselves the Labor Party.
Even if you conquer the mountain of ending negative gearing and the insanely generous tax subsidies that investors get, even then you need to wait a decade just to see prices enter a sane range relative to income again.
Millennials are doomed. Half of them will be renting until they die. The only way out of this trap is to making own 3-10 homes a bad investment. But can you imagine any Australian government decommodifying housing? It’s not going to happen which means a generation of renters and a poverty time bomb when the millennials want to retire.
For people stuck in the renting trap already in their 40s, they’re doomed now and the best idea the intelligentsia have is “maybe just live with your rich parents who sent you to a private school a bit longer and ask them for a loan.”
What’s needed is (1) a sudden and total end to the enormous subsidy given to the already wealthy in the form of tax incentives for property investment and speculation, (2) inflation driven driven by wage growth to reduce the real value of housing to bring it back to an affordable level.
Neither of the major political parties are unwilling to do (1) and even the “left” of politics view wage growth and inflation as the key evils that hurt “the economy”.
So we’re fucked. Time to read Mao.
Those houses are enormous! They're bigger than some apartment complexes I've lived in. But they're all right next to each other, and there's not a tree in sight. I'm guessing it's a brand new development for the upper-middle class. Is that right?
No. These houses are normally bought by recent migrants looking for a place to settle and raise a family. At least that’s the demographic most commonly buying them in Melbourne. It’s way more affordable and attainable than buying in the trendy in-demand inner and middle suburbs. People are often mortgaged to the absolute maximum of their abilities to get a foot in the door. The style of house is often sold as a pre-designed package by the developers, with little scope to change the design. And if you do want to change it, that’s extra cost that the buyers often cannot afford. Don’t blame the people living here, they are just trying to find a place to live. The blame needs to be with the government and councils for not setting better regulations for developers to allow for more green space, transport and amenities. Better yet, clearing the way for more family friendly mid and high density infill in the inner and middle suburbs, so the sprawl can be slowed.
Wait, how much does one of these cost? Those would be very expensive in the USA, given their size, and the fact that they look to be brand new.
Are you from the US? Think of Melbourne and Sydney like any huge populous city there. Closer to the centre costs more, even if it’s smaller. Location not size is the main driver of cost. A 2 bedroom apartment in Fitzroy (inner city) can cost more than a 4 bedroom house in Mernda (new development at city outskirts).
Yes, I'm in Seattle. A house like these would be over half a million dollars, an hour away from the edge of the city. There are little towns dotting the outskirts of King County, and they're all still prohibitively expensive.
Oh they still are well and truly over that here. but a one bedroom unit closeish (Newtown in Sydney as an example) to the city would be about a half million usd
I live in NYC. Many Wall Street office buildings have already been repurposed as apartments/condos.
interesting as everytime I see this suggested everyone talks about how it's too hard to do that. I don't deny there are challenges involved but it always felt like such a copout when I've seen literal grain silos turned into apartments
They started a while ago, because it was much cheaper to convert the older buildings to housing than it was to rewire them to handle computers and the HVAC computers need.
imho, the building owners will cry about how hard it is until they get a fat subsidy to convert.