Tag Archives: housing unaffordability

bitter and negative

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I got really pissed off this afternoon when the RBA cut the official Australian interest rate by a full 1 percent. It means that K and I won’t be able to save as fast anymore because our savings won’t compound as much, which is really annoying.

After work it was still bothering me when I decided that I should stop worrying about it at all, and I should stop being so negative. I’m really passionate about housing (un)affordability, but I think lately I’ve been coming across bitter and negative, especially towards some speculative property investors who I work with.

So I decided to do something nice, but lo-fi, tonight, to take my mind off it. We went to Kangaroo Point cliffs with a picnic and sat and watched the river and the city. We listened to Radiohead’s OK Computer which I, remarkably, had lost over the years.

At home we then watched YouTube film clips of heaps of the songs we remember from growing up. My favourite was ‘She don’t use Jelly‘ by The Flaming Lips.

In bed I started to read my Big Issue from yesterday. Straight away I saw a Hearsay quote I loved:

“You can’t keep money around for ever. It’s like saving sex for your old age.” ~ Warren Buffett

Then I read Editor Alan Attwood report that The Big Issue street sales are suffering because of the current economical climate:

“The general economic malaise has made it harder than ever to sell magazines on the street.” ~ Alan Attwood Editor, TBI 314

I couldn’t sleep. I decided to get up and re-read Instructions for Life. I then thought about writing this blog post.

But maybe dropping interest rates today wasn’t such a bad thing. It might finally free up some cash for people to actually buy a copy of The Big Issue off Greg, or one of the other street vendors. Or maybe they’ll just use the freed cash to buy some more shit for their MacMansions, or worse, to feed those hungry hungry pokies. But I’m just being bitter and negative again, aren’t I?

four billion is a really large number

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The whole corporate bailout thing happening in the US and now Australia really pisses me off. So I was glad they published my letter to the editor of the Courier Mail today.

The whole bail out situation smells fishy to me:

“It’s not based on any particular data point, we just wanted to choose a really large number.”

- A Treasury spokeswoman tells Forbes.com on how they came up with US 700 billion dollars as the bail out figure.

I guess that’s how Wayne Swan came up with his four billion dollar figure to “boost competition in the mortgage market”.

Mark Stacey of Sorrento in WA put it really well in today’s Australian newspaper when he said:

It is sad to see the major political parties squabbling to claim ownership over a bad idea, namely the use of taxpayers’ money to increase lending for mortgages. If lending money for house purchases was the route to a propserous and secure future, we’d already be in financial nirvana.

Malcolm Turnbull doesn’t get it. Wayne Swan doesn’t get it either. It’s all rather worrying.

Where else will the Washington Mutual equivalents in Australia get their money?

Update: Banks in Britain are having the same sort of financial problems and other banks there have “… refused to buy mortgage loans that customers are struggling to repay” (link), unlike the Australian Government who is proposing to do just that, with taxpayers’ funds nonetheless.

Update (2 Oct 2008): I sent PM Kevin Rudd a letter and got a standard response saying that they’ll take my opinions on board and send me an official response.

bursting the security bubble on insight

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It was interesting frightening to watch Bursting the Bubble on Insight tonight. I still can’t get over how much debt Australians have taken on; Insight mentioned that we as individuals have seven times greater debt than during the recession in the early nineties: scary!

I read a lot about housing unaffordability in Australia and I have read lots of stories about Australian families who have bought overpriced housing (what housing isn’t overpriced) because of the alleged security that a house provides.

The one thing that Insight successfully showed tonight is that an expensive house with a large mortgage doesn’t actually provide security at all, it just quite the opposite. How can any person with a large mortgage requiring multiple incomes and uninterrupted employment just to service the debt at current interest rate levels feel any bit secure? Isn’t that what security is about, feeling secure?

I would feel insecure with a mortgage large enough to pay for the apartment we rent. I would feel insecure buying any apartment in Brisbane at the moment knowing that we would need two full times jobs for 30 years just to service the debt. I feel secure renting a place knowing that we have a few years rent in savings in case something goes wrong. I feel secure knowing that I could quit my job tomorrow and we could still easily afford rent and living expenses from just one salary. Now that’s security.

greed, stupidity or suffering?

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I was so stoked to see my letter to the editor about this article in the Courier Mail today, along with one from a fellow bubblepedian. I love the headline too.

Update (19/08/2008): I re-read it today and noted that I was quoted at the top of the page as well. Even better!

melissa ketcell: what were you thinking?

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It sickened appalled me to read Melissa Ketcell’s article in the Courier Mail today report that speculative property investors are “suffering with rental returns at their lowest in a decade”.

Article by Melissa Ketchell

Article by Melissa Ketchell

How can any journalist compare the suffering of a renter worried about being able to find an affordable home for their family with the supposed suffering of greedy, speculative property investors who are provided with generous Government taxation concessions including negative gearing and capital gains tax exemption?

When an investor buys a Brisbane investment property for the median price of $450,000 they know that the median Brisbane rent is $18,200 and that it will cost them $32,625 in interest per year. But they still do it! You can’t say that they are suffering.

I think some people in the media really need to take a good close look at their behaviour. They’re hardly being responsible or ethical.