Six months later and Mr McNamara from Australian Property Monitors is at it again. In a short piece titled “Rents in Australian cities will soar in the next four years” he once again singles out Gen Y as the cause of rising rents.
APM general manager Michael McNamara said rental supply was tight as a drum.
“As Gen Y leaves home and strong migration patterns take effect, our construction sector struggles to keep up the supply of well-located, affordable property to accommodate a growing population of renters,” he said.
Of course people are moving out of home, but to somehow come to the conclusion that because someone born post-1980 rather than pre-1980 will somehow impact the rental market more is simply ridiculous. There’s not some backlog of youngsters living at home that are all suddenly going to move out at once!
An article in The Age today, titled “Lightning internet on way“, makes the dubious claim that the Australian Goverment’s subsidy of a fiber-to-the-node network will allow connections of 100 times faster than what is currently available.
Sounds good, right?
Not so much when they consider “what is currently available” to be 256 kbits.
But by deploying VDSL, (also known as Very High Speed DSL) technology, Senator Conroy said the new network would be able to carry up to 25 megabits per second.
Most broadband users currently receive only 256 kilobits per second — 100 times less capacity than 25 megabits — using ADSL technology.
Seeing as ADSL2+ has a theoretical maximum of 24 megabits, I think what they meant to say is “no faster than what is currently available.”
Housing affordability is something that I’ve become passionate about, and the amount of coverage the issue got during the 2007 election was great to see. It’s obviously an issue that plays on the mind of many Australians, a fact that was reflected by the popularity of my previousposts on the issue.
Despite the widespread interest, housing affordability in Australia continues to go from bad to worse.
Demographia has released its 4th Annual Housing Affordability Survey (PDF), and as last year Australia is well represented in the top 50 least affordable markets. There have been a number of changes, however:
Mandurah, the Sunshine Coast, and the Gold Coast are more unaffordable than Sydney;
Bundaberg, Cairns and Mackay are in the top 50;
Bundaberg is as unaffordable as New York City;
It appears that the reason Australia features so prominently compared to last year’s survey is the simple fact that Australia now has more markets surveyed. Only 8 Australian regions were surveyed last year, as opposed to a full 28 this year.
Time will tell if the Rudd Government’s promised policies can have any effect. Any solution needs to focus more on land supply rather than increasing buying power, and fact that I’m not convinced will actually happen. Australians as a whole aren’t short of a coin or two - reflected by the interest rate rises by the RBA attempting to slow inflation.
Don’t give us more money to buy houses, make more houses available for us to buy!
Blaming “Generation Y” for everything seems to be the order of the day, especially on news.com.au. The latest problem to be caused by this generation?
Rising rents.
Mr McNamara blamed the rent rises on Generation Y hitting their late 20s and moving out of home.
“Inner city markets are experiencing rapidly rising rents through the influence of Generation Y,” he said.
He believed Generation Y tenants would rather “pay exorbitant rent in inner city locations than live in what they see as the cultural wasteland of suburbia.”
If only those pesky youngsters would buy an overpriced house in the suburbs, the sensible older generation wouldn’t have to pay so much rent!
Surely I’m not alone in thinking that the new Cat Empire song “No Longer There” stinks?
I’m a big Cat Empire fan - I’ve seen them live a couple of times, and their show is fantastic. For the most part, their albums are spot on as well. But this latest song, a slow ode to environmentalism, is a train wreck. It honestly sounds more on par with karaoke at the Lord Stanley than a band that recently toured the US and the UK.
ABC’s Four Corners just aired a fantastic episode on the fallout from the US sub-prime mortgage crisis.
I love this quote from the end:
PROFESSOR ROBERT SHILLER, ECONOMICS, YALE UNIVERSITY: You know some people think that home prices go up 10 per cent a year. Do you know what Amsterdam would be worth today if it went up 10 per cent a year for the last 350 years? And if people know about the power of compound interest it would be worth more than the solar system or something. It can’t happen.
So if you look about long term trends in real estate maybe one per cent a year, tops, over long, over centuries. Otherwise it’s just, it doesn’t fit. It’s just not going to work.
If I ready one more Baby Boomer whinging about how all young people these days are too picky about where they live, and back in their day their first house was a fibro shack in the outer suburbs so “stop whinging” I think I’ll just stop and scream. Too picky, my arse!
The point of this post is, of course, going to be about the “housing crisis” in Australia. It’s about how the Baby Boomer’s have the nerve to insult us for bringing up this point, to tell us that they remember paying 17% interest under Labor and how it was all so very bad back then, so quit your bitching and buy some tiny place in Ipswich that you can afford. Continue reading →
For many young Australian’s, tertiary study is financed by a government-run loan program known as “HECS-HELP“. Basically, the government loans you the money to cover tuition fees; and the loan is only “indexed” at rate equal to CPI. This loan is repaid through automatic deductions taken out using the same system as tax (PAYG) once you’re earning over the minimum repayment threshold, which is currently just over $38,000 per year. After this threshold, a percentage of your entire paycheck is automatically deducted; not the amount above the threshold as happens for income tax.
Unfortunately, many young Australians have no idea exactly how the repayment of this debt affects them day-to-day. Is this a loan that is easily paid off? How long will it take? I decided to do a little bit of number crunching and work out exactly what it means.
On the way home from work I was chatting to a colleague about money, and remembered a phrase I heard a while ago: “Don’t put money in the bank, own the bank!”
While I can’t recall the exact place I heard it (although I’ve found at least one site that looks at the concept), I thought it was at least quickly looking into it. I compared putting money in a ING Direct “Savings Maximiser” account to buying stocks in four major Australian Banks: Commonwealth, Westpac, Suncorp, and Bank of Queensland.
The amount invested was $1000; I’ve taken into account capital growth and dividends; and the time frame of the comparison was 1 year ending today. The current interest rate of the ING Direct account is 6% pa.
It should be noted that in the time period shown, Commonwealth and Westpac paid two dividends whereas Suncorp and Bank of Queensland only paid one.
The comparison shows that even the poorest performing investment, Suncorp-Metway, still earnt $38 more than a cash account - that’s an effective interest rate of 10%!
Now, I’m not a financial adviser, nor am I any sort of economist or analyst, so take what I say with a grain of salt. I also didn’t take into account brokerage fees, nor did I account for the tax benefits of the dividends being fully-franked. Investing is also carries a higher risk, so you could possibly lose every cent you invest.
