By Guest Blogger, Terry Ryder, founder,
hotspotting.com.au and propertyU
There’s probably nowhere in society where you’ll find more myths, misconceptions and misinformation than in media coverage of residential real estate.
And no property subject produces more vacuous hot air than housing affordability.
Journalists, politicians, economists and other attention seekers see it as a hot button issue, so it’s a perennial favourite for drumming up some easy profile and readymade clickbait.
Research firms, comparison websites, mortgage networks and a host of other entities love to publish “research” on affordability to achieve cheap publicity.
The shortest path to free media profile is to toss together a “report” which finds that young Australians are doomed to a lifetime of renting because no one can afford to buy a house.
Another popular angle is to manipulate the data to support the claim that it takes 15 or 20 years to save a deposit.
One notoriously bad report publishes a document every year which claims that (a) everywhere in Australia is unaffordable; (b) Australia is the most unaffordable nation on the planet; and (c) Sydney is the world’s most unaffordable city.
Media is happy to publish this shallow nonsense even though the report compares Australia to only half a dozen other nations, making the claim of “most unaffordable in the world” a tad outrageous.
Equally nonsensical is the claim, year after year, that nowhere in Australia is unaffordable. If that were true, nothing would ever sell and all those sales at record prices across the nation in 2021 could not have happened.
The fact that 38% of all real estate sales in the past three years in Australia have been made to first-time buyers would tend to confirm that this report is rubbish.
Media, of course, doesn’t let any of that get in the way of a sensational story.
Somehow, even though its mathematically impossible, we’re the most unaffordable place on earth, nowhere in the nation is affordable, yet two-thirds of Australian households own their homes and over a third of properties are purchased by first-timers.
It’s super easy to massage statistics and set parameters to arrive at a pre-determined result on the affordability issue. Most of the reports that declare it takes over a decade to save a deposit are based on how long it supposedly takes to save a 20% deposit to buy a house in Sydney at the median price. It’s difficult to imagine an equation further removed from the reality of first-home buyers.
You don’t need a 20% deposit. FHBs don’t buy at the median price, not in Sydney nor anywhere else. It’s like a school leaver saving to buy a first car and complaining because they can’t afford a Mercedes.
And why always houses? How about factoring units and townhouses into the equation as viable options for first-timers?
Earlier this year, I collaborated with comparison website Canstar to produce the “Bright Starters” report for first-home buyers. The objective was to actually help and encourage young hopefuls, rather than to generate media sensation.
It looked at homes (units as well as houses) in the lower price quartiles and examined how long it would take a young couple, both working, to save a 5% deposit or a 10% deposit. In most cities and regional markets, a typical couple could be in their first home in less than two years.
The report, which was packed with all the relevant numbers, was a great tool for young buyers. It did receive some media publicity, but not nearly as much as the reports which claim it takes a decade or more to save a deposit. Media is not interested in being helpful – it seeks to create negative sensation and clickbait.
Affordability, of course, is relative. It depends on the individual, their age, their income and their attitude. And it depends on what your benchmark is.
Brisbane has experienced elevated activity from interstate buyers in recent years because its cheap (current median dwelling price $720,000) compared to Sydney ($1,035,000), Canberra ($875,000) and Melbourne ($770,000) – and there are parts of the Brisbane metro area where you can buy houses for well under $500,000, which you can’t do in the bigger cities.
Attitude is critical and part of that is expectation. If your expectation is that you will achieve your dream home in a prime location as a first purchase, then you’ll probably be renting a long time.
One major newspaper recently ran a story which featured a young woman whingeing because she had to work three jobs to save a 20% deposit for her first home – which she intended to be a house in the Northern Beaches area of Sydney. Her parents lived in a $3 million house in the area and she wanted the same as her first home.
Major city newspapers like the Sydney Morning Herald and The Age recently ran an article which claimed first-home buyers were doomed because you needed a deposit of over $200,000 to buy in Melbourne and almost $300,000 to buy in Sydney.
It was based on that unrealistic scenario of a 20% deposit for a dream home in our most expensive cities, which no sensible first-timer would even contemplate.
Achieving first-time home ownership requires sacrifice and compromise.
If you’re unwilling to do that, you face a long and difficult path.
To have one of the friendly Propertybuyer Buyers' Agents to contact you:
or
call us on 1300 655 615 today.
.svg)
.svg)
.svg)
