What do you make of this? The state owning 25% of the house you just bought with a 50k deposit? | PUNT ROAD END | Richmond Tigers Forum
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What do you make of this? The state owning 25% of the house you just bought with a 50k deposit?

My brother started paying his first mortgage at 14%, we had I think 8% when we started. But the really big difference is the price of the house. We paid 5x my income back then, I now earn more in real terms and the house is worth 20x my income.

Interest rates make a difference but it is the ridiculous house price inflation which has really made it impossible to buy a house.

So ridiculous I could buy a house in Brooklyn New York (not so much Manhattan, but not totally out of reach), some apartments in Paris, some apartments in Berlin etc and get change from selling a house in Melbourne. It is absurd that housing is so expensive in Australia.

DS
 
LeetoRainestoRoach used to work at the State Bank in the late 80s when interest rates were almost 20% and he had a story of visiting ppl who hadn't made a mortgage payment in four years.

I was told banks work on an interest rate of 3.5% to work put if you can service a loan.

I talked to new owners in my street, property listed at 450-500 ... sold for 615. Young couple during lockdown, not a lot of choice but both still working and more in savings.

Banks were only using 2% I believe but upped it to 3.5% either late last year or early this year to protect about upcoming interest rate rises.

Affordability though comes down to the individual despite what the banks factor in. If the banks factor in that current repayments for someone might be $1500 and they can afford $2000 lets say, it still comes down to how flexible the individual is to be able to flex their spending habits to their new reality and thats where people come in, some are big spenders, others are frugal. I'm also buying a home (settling in about 6 weeks) but because I'm a pom and a lot of mu family live overseas I save $500 / month for travel every month, so if something major happens I have that item that I can flex. I'm lucky enough to be able to afford this and have a current positive balance in my monthly household budget but I'm quite active with my finances, others aren't and just spend as they go based upon whats left which makes it much harder to pinpoint areas you can save in if and when interest rates rise.
 
Banks were only using 2% I believe but upped it to 3.5% either late last year or early this year to protect about upcoming interest rate rises.

Affordability though comes down to the individual despite what the banks factor in. If the banks factor in that current repayments for someone might be $1500 and they can afford $2000 lets say, it still comes down to how flexible the individual is to be able to flex their spending habits to their new reality and thats where people come in, some are big spenders, others are frugal. I'm also buying a home (settling in about 6 weeks) but because I'm a pom and a lot of mu family live overseas I save $500 / month for travel every month, so if something major happens I have that item that I can flex. I'm lucky enough to be able to afford this and have a current positive balance in my monthly household budget but I'm quite active with my finances, others aren't and just spend as they go based upon whats left which makes it much harder to pinpoint areas you can save in if and when interest rates rise.
Standard is 3% higher than carded rate you're paying. That's set by the regulators (ASIC & APRA), I'm a lender for a mutual bank, and this is built into our servicibility calculator.

If you accept variable rate, ours is 2.14% variable from Monday, so rate we would use to assess is 5.14%. Fixed rates are currently on the rise.
 
Banks were only using 2% I believe but upped it to 3.5% either late last year or early this year to protect about upcoming interest rate rises.

Affordability though comes down to the individual despite what the banks factor in. If the banks factor in that current repayments for someone might be $1500 and they can afford $2000 lets say, it still comes down to how flexible the individual is to be able to flex their spending habits to their new reality and thats where people come in, some are big spenders, others are frugal. I'm also buying a home (settling in about 6 weeks) but because I'm a pom and a lot of mu family live overseas I save $500 / month for travel every month, so if something major happens I have that item that I can flex. I'm lucky enough to be able to afford this and have a current positive balance in my monthly household budget but I'm quite active with my finances, others aren't and just spend as they go based upon whats left which makes it much harder to pinpoint areas you can save in if and when interest rates rise.
It amazes me how many people don't do this. One of the most humbling exercises one can do when going through this process is to start by calculating all of what I would call the 'base costs'.

Essentially: housing costs (mortgage, rent, maintenance, Council rates), food and groceries, utilities, insurances, kids schooling, sporting and extra curricular costs (for those with kids), transport, recurrent medical expenses/medications (if applicable), basic sport/fitness costs for staying fit and healthy. Basically, what are the base costs to just keep the household running. Then average these costs per fortnight/per month. My wife and I did it years ago before having our two kids and have maintained and adjusted over the years. It's a way of saying "What is the minimum we need to be making in order to live and keep the household running?"

Put into context, I am quite prudent to even frugal with money (so is my wife), so we don't spend on expensive things. Grew up partly raised by depression era grandparents, who's values and attitudes around money were very much instilled in me. We are in a situation where we fully own our modest 1950s bungalow (so no mortgage or rent), we have no car finance/leases (I buy cars that have already done a fair amount of their depreciation and keep them until they basically die). Our kids are at a government school (so no private school fees) and do a couple of club sports. My wife and I play a bit of cheap club sport and I just go to a local community non profit gym for weights (no expensive gyms and/or health clubs for us). Yet it still costs us the majority of my wife's salary to cover these base costs. And she is on probably a median public servant's kind of wage. Hypothetically, if we ended up on just her income because I got structured out of work, it would take most of her fortnightly wage just to keep things running (again stressing, we have zero debt, don't pay rent or a mortgage and don't pay private or even Catholic School fees either). That is how expensive just living is. And I don't think people have any concept of how much of their income is going on these "base costs." So really have no concept of how much is truly left over.

And therefore extending on what you are saying, it goes some way to explaining why many just stay on a hamster wheel, not really knowing or pinpointing why they aren't really getting ahead. And any change in circumstance (time out of work, interest rises, unexpected bills etc) is enough to send them into oblivion.
 
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It amazes me how many people don't do this. One of the most humbling exercises one can do when going through this process is to start by calculating all of what I would call the 'base costs'.

Essentially: housing costs (mortgage, rent, maintenance, Council rates), food and groceries, utilities, insurances, kids schooling, sporting and extra curricular costs (for those with kids), transport, recurrent medical expenses/medications (if applicable), basic sport/fitness costs for staying fit and healthy. Basically, what are the base costs to just keep the household running. Then average these costs per fortnight/per month. My wife and I did it years ago before having our two kids and have maintained and adjusted over the years. It's a way of saying "What is the minimum we need to be making in order to live?"

Put into context, I am quite prudent to even frugal with money (so is my wife), so we don't spend on expensive things. Grew up partly raised by depression era grandparents, who's values and attitudes around money were very much instilled in me. We are in a situation where we fully own our modest 1950s bungalow (so no mortgage or rent), we have no car finance/leases (I buy cars that have already done a fair amount of their depreciation and keep them until they basically die). Our kids are at a government school (so no private school fees) and do a couple of club sports. My wife and I play a bit of cheap club sport and I just go to a local community non profit gym for weights (no expensive gyms and/or health clubs for us). Yet it still costs us the majority of my wife's salary to cover these base costs. And she is on probably a median public servant's kind of wage. Hypothetically, if we ended up on just her income because I got structured out of work, it would take most of her fortnightly wage just to keep things running (again stressing, we have zero debt, don't pay rent or a mortgage and don't pay private or even Catholic School fees either). That is how expensive just living is. And I don't think people have any concept of how much of their income is going on these "base costs." So really have no concept of how much is truly left over.

And therefore extending on what you are saying, it goes some way to explaining why many just stay on a hamster wheel, not really knowing or pinpointing why they aren't really getting ahead. And any change in circumstance (time out of work, interest rises, unexpected bills etc) is enough to send them into oblivion.

Yeah, I understand what you are saying, but I've never been able to actually budget. I could quite easily set this up I just have never been able to be bothered.

My budgeting has always consisted of setting aside a certain amount to throw at the credit card each fortnight when I get paid, put bills and discretionary expenses on the card, and see what the balance looks like to determine if I am spending too much or have some leeway. For someone who is lazy about finances it has worked for me, we all need to manage this in a way that we actually do the managing. If, like me, you know you won't add everything up and create a formal budget, you need to find a mechanism to somehow track things which you will actually do.

I'm lucky that this has worked for me. Own a house, don't have many expenses like a gym (I just ride to work), ideological issues with private schools so no expenses there when our daughter was at school (also meant we could afford to pay her CSP fees when she went to uni) etc.

The trick really is to realistically work out what mortgage repayments will be given current interest rates and interest rates plus a couple of percent (not quite worst case scenario but you need to know what your repayments might be) and see if it all adds up. You do need a little put aside but I do remember when I had a lot of trouble getting ahead at all, took years to get to that point. Mind you, ending the mortgage (yes, it can happen, you pay for long enough and it does end!) made a huge difference, seemed to make more difference than the actual mortgage payments. Another thing we did which just makes sense was to pay the mortgage fortnightly - you don't even know you are doing it, but you are getting 2 extra payments in every year which come straight off the principal.

We are both reasonably frugal but I still can't see how people on median incomes can afford a house with the prices the way they are these days.

DS
 
Yeah, I understand what you are saying, but I've never been able to actually budget. I could quite easily set this up I just have never been able to be bothered.

My budgeting has always consisted of setting aside a certain amount to throw at the credit card each fortnight when I get paid, put bills and discretionary expenses on the card, and see what the balance looks like to determine if I am spending too much or have some leeway. For someone who is lazy about finances it has worked for me, we all need to manage this in a way that we actually do the managing. If, like me, you know you won't add everything up and create a formal budget, you need to find a mechanism to somehow track things which you will actually do.

I'm lucky that this has worked for me. Own a house, don't have many expenses like a gym (I just ride to work), ideological issues with private schools so no expenses there when our daughter was at school (also meant we could afford to pay her CSP fees when she went to uni) etc.

The trick really is to realistically work out what mortgage repayments will be given current interest rates and interest rates plus a couple of percent (not quite worst case scenario but you need to know what your repayments might be) and see if it all adds up. You do need a little put aside but I do remember when I had a lot of trouble getting ahead at all, took years to get to that point. Mind you, ending the mortgage (yes, it can happen, you pay for long enough and it does end!) made a huge difference, seemed to make more difference than the actual mortgage payments. Another thing we did which just makes sense was to pay the mortgage fortnightly - you don't even know you are doing it, but you are getting 2 extra payments in every year which come straight off the principal.

We are both reasonably frugal but I still can't see how people on median incomes can afford a house with the prices the way they are these days.

DS
Fair to say, we go about it in slightly different ways, but I think really come to the same observation. It's a real eye opener.

When stripping it back to base costs, look how much of a median wage just running our household is. And that's a couple with fairly prudent to frugal tastes. We don't have expensive cars, private school fees etc to pay for. We don't even have a mortgage or rent. But it still costs equivalent of 85-90% of my wife's pretty median wage to maintain the household's base running costs. If we were a one income family on a median wage, there is not much left over to pay a mortgage or rent. In fact, it wouldn't be enough left over to go close to fully service a mortgage or even rent. Let alone any discretionary spending like a holiday (beyond camping in a $20 tent bought off gumtree, which would actually be handy for living in when you can't service a mortgage or rent), or going to the odd show or professional sporting match, even purchasing take away or a meal out. And certainly none to put aside as savings to cover unexpected events.

Which leads me on a bit of a different tangent. Taking into account the price of housing and what people are paying in mortgage repayments (your point) and the base cost of running a household (my point). I see people I know driving around in their $50-70k European SUVs, dual cab utes etc. 2-3 kids at private schools ($18-25k fees per child). They take the annual family trip to QLD (or Bali, Phuket etc in non COVID times), or alternatively have the $40-70k caravan with the bells and whistles. Paying $100 per week in PT gym sessions, have the latest iphone and multiple gadgets and screens for each family member. Not like they are Drs, law firm partners, millionaire entrepreneurs. Often just middle of the road professions. It doesn't add up. An educated guess, they are just continually redrawing/restructuring housing debt under the dangerous assumption that values will always go up at current rates, using perpetual debt to fund their lifestyle. Ultimately, staying on that hamster wheel. I just shake my head, surely it can't go on? One day the systemic Ponzi deck of cards has to crumble, surely?
 
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Fair to say, we go about it in slightly different ways, but I think really come to the same observation. It's a real eye opener.

When stripping it back to base costs, look how much of a median wage just running our household is. And that's a couple with fairly prudent to frugal tastes. We don't have expensive cars, private school fees etc to pay for. We don't even have a mortgage or rent. But it still costs equivalent of 85-90% of my wife's pretty median wage to maintain the household's base running costs. If we were a one income family on a median wage, there is not much left over to pay a mortgage or rent. In fact, it wouldn't be enough left over to fully service a mortgage or rent. Let alone any discretionary spending like a holiday (beyond camping in a $20 tent bought off gumtree), or going to the odd show or professional sporting match, even purchasing take away or a meal out. And certainly none to put aside as savings.

Which leads me on a bit of a different tangent. Taking into account the price of housing and what people are paying in mortgage repayments (your point) and the base cost of running a household (my point). I see people I know driving around in their $50-70k European SUVs, dual cab utes etc. 2-3 kids at private schools ($18-25k fees per child). They take the annual family trip to QLD (or Bali, Phuket etc in non COVID times), or alternatively have the $40-70k caravan with the bells and whistles. Paying $100 per week in PT gym sessions, have the latest iphone and multiple gadgets and screens for each family member. Not like they are Drs, law firm partners, millionaire entrepreneurs. Often just middle of the road professions. It doesn't add up. An educated guess, they are just continually redrawing/restructuring housing debt under the assumption that values will always go up at current rates, using perpetual debt to fund their lifestyle. Ultimately, staying on that hamster wheel. I just shake my head, surely it can't go on? One day the systemic Ponzi deck of cards has to crumble, surely?

Fair point, I don't know about Australia but I have read about this sort of thing happening in the USA. Probably added to the mess that was their housing crash, plus in a lot of states they can walk away from a mortgage and the bank gets only the house even if it doesn't cover the loan.

I must say I also wonder about the new cars people drive around in, school fees etc. Admittedly I live in a wealthy area but I do wonder how this is affordable even on 2 very good incomes. I wonder even more when I see houses going for $2m or more around here. We have never had a fancy car, private schooling etc and there is no way we could afford to buy our own house nowadays even with 2 decent incomes and not being profligate.

DS
 
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There are a lot of variables at play here.

Interest rates are at historic lows, they are only going one way, up. Hopefully those who borrowed while interest rates were low have some buffer, have paid down as much capital as they possibly could have and will be able to adjust. If I had a morgage I would have fixed the rates when they were very low, they weren't likely to go down and it gives surety for a limited amount of time at least. There will be people who lose their homes. The ones I have sympathy with are those who lose their residence, those renting out can go jump as far as I am concerned.

If you paid a huge price for a house in the last few years, then you likely paid a price which was not negotiable. You paid what would secure you a house. So, while it may look bad, if you could not get the house for less at the time and you figured it was better than paying the absurd rents they charge these days, then you probably made the right decision. Trouble is, watching the value fall while you are paying it off is going to feel horrible. You can rationalise this but it won't make you feel much better.

Inflation is a bit of a mixed bag here. Inflation erodes debt, it makes the debt lower in real terms. But, if house values don't rise with inflation, or, more importantly, wages don't rise with inflation, it is of little comfort that the value of your mortgage is reducing in real terms just because of inflation, because it won't be costing you less.

This situation could have been avoided. House prices have been rising at insane rates and taking away the incentives to buy investment properties (negative gearing, reduced capital gains tax on investor properties) while also building more public housing to reduce pressure on rents, could have reduced house price inflation. These options were not taken and house prices are the real issue here. It is an issue which has been kicked down the road because of low interest rates, but once interest rates rise it will cause a lot of pain.

DS
 
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There are a lot of variables at play here.

Interest rates are at historic lows, they are only going one way, up. Hopefully those who borrowed while interest rates were low have some buffer, have paid down as much capital as they possibly could have and will be able to adjust. If I had a morgage I would have fixed the rates when they were very low, they weren't likely to go down and it gives surety for a limited amount of time at least. There will be people who lose their homes. The ones I have sympathy with are those who lose their residence, those renting out can go jump as far as I am concerned.

If you paid a huge price for a house in the last few years, then you likely paid a price which was not negotiable. You paid what would secure you a house. So, while it may look bad, if you could not get the house for less at the time and you figured it was better than paying the absurd rents they charge these days, then you probably made the right decision. Trouble is, watching the value fall while you are paying it off is going to feel horrible. You can rationalise this but it won't make you feel much better.

Inflation is a bit of a mixed bag here. Inflation erodes debt, it makes the debt lower in real terms. But, if house values don't rise with inflation, or, more importantly, wages don't rise with inflation, it is of little comfort that the value of your mortgage is reducing in real terms just because of inflation, because it won't be costing you less.

This situation could have been avoided. House prices have been rising at insane rates and taking away the incentives to buy investment properties (negative gearing, reduced capital gains tax on investor properties) while also building more public housing to reduce pressure on rents, could have reduced house price inflation. These options were not taken and house prices are the real issue here. It is an issue which has been kicked down the road because of low interest rates, but once interest rates rise it will cause a lot of pain.

DS
Short stay accommodation and the new laws brought in for renters in that they can basically do what they like has also made the situation worse.

Perhaps opening up more fringe farmland in regional locations for social housing would be ideal. As it’s a land shortage, with no titled blocks around. But the new tax brought in if your land gets rezoned from farmland to residential will increase costs, which is poor policy.
 
Short stay accommodation and the new laws brought in for renters in that they can basically do what they like has also made the situation worse.

Perhaps opening up more fringe farmland in regional locations for social housing would be ideal. As it’s a land shortage, with no titled blocks around. But the new tax brought in if your land gets rezoned from farmland to residential will increase costs, which is poor policy.

Yeas, short stay accommodation has certainly exacerbated the problems.

Despite the fact that I am involved with a local group opposing inappropriate development, mainly because I think 12 storey blocks of flats in residential areas mainly made up of single storey houses sucks, I reckon we do need some more density. I would have no issue with 4 storey blocks of flats on main roads, it is the high rise I object to. In fact, there is no doubt in my mind that we will eventually increase density, it is just whether we wreck a lot of suburbs in the process. Of course, this is not going to be easy as any increase in density has an impact on sewerage systems, storm water, road congestions, public transport capacity etc and if families are living more in apartments then we will need more public open space. I think we have to be careful expanding the city too much, the infrastructure is not there and it just gets a bit ridiculous. Melbourne is already very large, lets temper expansion with some more density.

DS
 
It amazes me how many people don't do this. One of the most humbling exercises one can do when going through this process is to start by calculating all of what I would call the 'base costs'.

Essentially: housing costs (mortgage, rent, maintenance, Council rates), food and groceries, utilities, insurances, kids schooling, sporting and extra curricular costs (for those with kids), transport, recurrent medical expenses/medications (if applicable), basic sport/fitness costs for staying fit and healthy. Basically, what are the base costs to just keep the household running. Then average these costs per fortnight/per month. My wife and I did it years ago before having our two kids and have maintained and adjusted over the years. It's a way of saying "What is the minimum we need to be making in order to live and keep the household running?"

Put into context, I am quite prudent to even frugal with money (so is my wife), so we don't spend on expensive things. Grew up partly raised by depression era grandparents, who's values and attitudes around money were very much instilled in me. We are in a situation where we fully own our modest 1950s bungalow (so no mortgage or rent), we have no car finance/leases (I buy cars that have already done a fair amount of their depreciation and keep them until they basically die). Our kids are at a government school (so no private school fees) and do a couple of club sports. My wife and I play a bit of cheap club sport and I just go to a local community non profit gym for weights (no expensive gyms and/or health clubs for us). Yet it still costs us the majority of my wife's salary to cover these base costs. And she is on probably a median public servant's kind of wage. Hypothetically, if we ended up on just her income because I got structured out of work, it would take most of her fortnightly wage just to keep things running (again stressing, we have zero debt, don't pay rent or a mortgage and don't pay private or even Catholic School fees either). That is how expensive just living is. And I don't think people have any concept of how much of their income is going on these "base costs." So really have no concept of how much is truly left over.

And therefore extending on what you are saying, it goes some way to explaining why many just stay on a hamster wheel, not really knowing or pinpointing why they aren't really getting ahead. And any change in circumstance (time out of work, interest rises, unexpected bills etc) is enough to send them into oblivion.
I like your approach. But while you say your wife's after tax income would take care of your family,'s essential spending that implies all your income is used on discretionary spending and savings / investment. That is a solid place to be.
 
Fair to say, we go about it in slightly different ways, but I think really come to the same observation. It's a real eye opener.

When stripping it back to base costs, look how much of a median wage just running our household is. And that's a couple with fairly prudent to frugal tastes. We don't have expensive cars, private school fees etc to pay for. We don't even have a mortgage or rent. But it still costs equivalent of 85-90% of my wife's pretty median wage to maintain the household's base running costs. If we were a one income family on a median wage, there is not much left over to pay a mortgage or rent. In fact, it wouldn't be enough left over to go close to fully service a mortgage or even rent. Let alone any discretionary spending like a holiday (beyond camping in a $20 tent bought off gumtree, which would actually be handy for living in when you can't service a mortgage or rent), or going to the odd show or professional sporting match, even purchasing take away or a meal out. And certainly none to put aside as savings to cover unexpected events.

Which leads me on a bit of a different tangent. Taking into account the price of housing and what people are paying in mortgage repayments (your point) and the base cost of running a household (my point). I see people I know driving around in their $50-70k European SUVs, dual cab utes etc. 2-3 kids at private schools ($18-25k fees per child). They take the annual family trip to QLD (or Bali, Phuket etc in non COVID times), or alternatively have the $40-70k caravan with the bells and whistles. Paying $100 per week in PT gym sessions, have the latest iphone and multiple gadgets and screens for each family member. Not like they are Drs, law firm partners, millionaire entrepreneurs. Often just middle of the road professions. It doesn't add up. An educated guess, they are just continually redrawing/restructuring housing debt under the dangerous assumption that values will always go up at current rates, using perpetual debt to fund their lifestyle. Ultimately, staying on that hamster wheel. I just shake my head, surely it can't go on? One day the systemic Ponzi deck of cards has to crumble, surely?
Many people on a wide range of incomes spend 100% of what they earn. That's how they see money. And it doesn't take much for even a relatively young couple to earn an income north of $250k. Bloke in a trade at 150 wife a nurse with shift allowances etc. Wife HR manager 125k husband accountant 125k for example. Gives them 180k? clear to buy toys and luxury ...and the mortgage.
 
I like your approach. But while you say your wife's after tax income would take care of your family,'s essential spending that implies all your income is used on discretionary spending and savings / investment. That is a solid place to be.
Many people on a wide range of incomes spend 100% of what they earn. That's how they see money. And it doesn't take much for even a relatively young couple to earn an income north of $250k. Bloke in a trade at 150 wife a nurse with shift allowances etc. Wife HR manager 125k husband accountant 125k for example. Gives them 180k? clear to buy toys and luxury ...and the mortgage.

Correct assumption, as mentioned we live conservatively with money. We got into this position with much lower salaries by being disciplined with money and making the no.1 priority paying down our mortgage early in our marriage to give us financial flexibility once we had kids and are now mid career earning better salaries.

But given we are in the habit of being conservative - it becomes entrenched. So it's not like we have adjusted our lifestyle accordingly as we became debt free and salaries increased. As mentioned, we still buy used (Asian) cars that have done a fair amount of their depreciation. We don't send our children to high fee schools (they are at public Primary School at present), no expensive gyms, stay in our modest house (don't get into the hamster wheel of continually trading up), still bring our lunch to work etc. We're not total monks, we have some electronic devices in the house, but they tend to be communal devices for the family to share that we don't replace until they die (everyone doesn't get their own individual device). We definitely do go on holidays to enjoy family time together, but we set budgets - don't go for the bells and whistles 5 star options. Try and give the kids an appreciation for the simple things and don't set unrealistically high expectations of instant gratification and consumption for consumption's sake.

So as you infer, the lion's share of it goes into investing - rather than expensive toys, 5 star holidays, living the instagram life. Hence building a safety buffer and a future for us and our kids. Plus gives flexibility while we are in a fortunate position to send regular payments to charities (I draw this from our investment funds each month) and help people not as fortunate as us.

I suppose what my upbringing (influenced by grandparents who knew rural poverty in the 1930s) instilled in me. While things might be good at the moment, where we are in a fortunate situation on good combined income. I don't take it for granted and hence, try not to get too used to it, or rely on this being perpetually the case. Things can always turn (for example, adverse health events where one can't work and/or there are big bills - can happen to anyone at any time). So we keep ourselves in a situation where we are not on a knife's edge stressed about where the next dollar is coming from. And if we did find ourselves out of work, we could cope for some time, or not be too stressed if we needed to take a lesser job on lower salary - but still maintain the same lifestyle we are accustomed to.
 
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Short stay accommodation and the new laws brought in for renters in that they can basically do what they like has also made the situation worse.

Perhaps opening up more fringe farmland in regional locations for social housing would be ideal. As it’s a land shortage, with no titled blocks around. But the new tax brought in if your land gets rezoned from farmland to residential will increase costs, which is poor policy.

Govts have to bite the bullet. Build more of what we used to call n Vic Housing Commission properties and rent at low rates to those below a certain income. Any attempt to intervene and influence market prices is doomed to fail.