We have been experiencing some very sporadic weather in Brisbane lately. There was lots of heavy rain this afternoon followed by a dramatic sunset. Whilst taking some snaps of the mountains to the west, Kitty pointed out the city to the east catching the reflection of the sunset. I love staring at sunsets and watching them change, like a film; the colour, the light, the intensity. One minute there it’s there, the next minute it’s gone.
I picked up my brand new shiny car today: ‘Dub‘, a silver 2008 Mazda3 turbo diesel. The reason I chose this particular model is that modern diesel engines are proving to be greener than even petrol/electric hybrids. This is because:
I drove Dub to dinner tonight which was enjoyable and I had a feeling that it was just the start of many good times ahead.
The car buying process was relatively painfree. I managed to organise a reasonable discount, a 2008 model for the 2007 clearance price and $1000 of free diesel. Using the combined fuel efficiency rating of the car (6.0l/100km) I estimate the $1000 will last us about 12,000 km. But guess what? When I picked it up today they said it’ll be 4 weeks until I receive my fuel card, in the mail! 4 weeks! So I have 12,000 km worth of fuel, but in the meantime I have to fill it up using my own cash.
How’s that for ruining the end user experience!
Update 21/02/2007 - My $1000 fuel card arrived today via registered post! A little over two weeks after purchase. Not great, but better than I expected. I guess it was a case of ‘under promise, over deliver’.
On the verge of another (official) interest rate rise this week in Australia, a soon to be published report predicts that:
“750,000 owners will be hit by ‘mortgage stress’ in the coming months, meaning more than 35 per cent of their income will be swallowed by home-loan repayments”.
Last week it was revealed that the housing on Queensland’s Sunshine Coast is less affordable than housing in New York City!:
“On average, Australian families are forced to spend 6.1 times their entire household income to buy a typical home compared to 3.1 times in Canada and 3.6 times in the US, and that’s before interest charges.”
“Australia (with New Zealand) has the most unaffordable housing in the surveyed nations,” economist and report author Wendell Cox said.”
So it seems there are two groups of people in Australia who are screwed. The people who paid too much for their home and can no longer afford it due to frequent interest rate rises, and those who are kept entirely out of the housing market because they can’t afford real estate any longer or don’t want to continue to inflate market prices. I have a lot less sympathy for the former than the latter.
There seems to be another group in Ausralia who are laughing. These are the ‘smart’ baby boomers who have a fully paid off home and a few investment units. The only thing worrying them is that their kids are finishing uni with five and six figure hecs debts, no permanent jobs and little chance of ever owning their own home.
Most people who only own one property (their home), even if they bought it when prices were cheap, aren’t really benefiting from the property boom. If they sell their house now for ten times what they paid for it, they still have to buy another place, and this is going to be just as expensive, if not more, than their current home. Then they have to spend more on transactional costs and pay higher property rates because their property is worth ‘more’ than before.
So who is to blame for the artificially inflated house prices in Australia? Is it the baby boomers for lapping up their investment property portfolios? Is it the government for allowing capital gains tax exemptions on primary places of residence (encouraging continual ‘upgrading’)? Is it the banks for lending to sub-prime customers who can’t afford a house in the first place? (sounds like the US anyone?) Is it the real estate agents for discouraging renting and scaring people into buying their own home?
I am sure that everyone has a different opinion but I haven’t seen any easy or quick way out of this hole we are in.
