Home ownership and interest rates provide solid point-scoring opportunities for politicians, but the whole narrative is increasingly out of touch with the reality of many working families in Australia.
Home ownership and interest rates provide solid point-scoring opportunities for politicians, but the whole narrative is increasingly out of touch with the reality of many working families in Australia.
A long weekend, a campfire and a night sky glittering with stars briefly put me beyond the reach of digital devices, work, and even the news.
A small bush block, a dry creek bed and a proper tree house transformed our little family, even though we were only a few short hours from the city fringe.
For the first time in my deeply suburban life I was totally captivated by this bucolic experience.
And then we took a drive into the nearest town.
Buying a coffee from the local pub was our first mistake, but what left a worse taste in my mouth was the visual wreck we passed on the way into town.
The pleasant rising of the road and rustic scenery was brought into stark contrast just a few hundred metres from the town outskirts when we came across the results of a paddock clearing – mostly felled trees, branches and roots, piled haphazardly just beyond the shoulder of the road.
This organic refuse is one outcome of high house prices, stagnant wages growth and Australia’s attachment to home ownership, which has put this issue – yet again – front and centre in a federal election campaign.
This time the politicians are arguing about negative gearing, which to some people is the saviour of the property market, while others view it as an unnecessary incentive for well-heeled investors.
Prime Minister Malcolm Turnbull claims changes to negative gearing will inevitably lead to lower house prices, given about one third of all money borrowed to buy property is taken up by investors.
The way I see it, negative gearing plays a role in maintaining the pipeline of new dwellings, fuelling some development and adding to total housing stocks.
That’s important, considering the shortage of new housing is partly to blame for Australia’s high property prices, particularly on the east coast.
Some property analysts blame the state governments for being too slow to release land for development, which brings me back to the sight that knocked me out of my country reverie.
In essence all I saw were a few dead trees, stacked among great mountains of dirt and roots at the edge of a new housing estate.
This barren little piece of acreage was pegged with wooden stakes, each one marked with brightly coloured tape that fluttered in the early morning breeze amid the swirling topsoil.
This is modern residential property development on the edge of a regional town; another estate carved out of what was very recently farmland, clear felled, graded and ready to be sold off as affordable residential property.
It’s where the rubber hits the road – as politicians love to say – in the housing game, and the ‘solution’ we’ve come up with to provide cheap housing on the edge of every Australian city; it’s not unique to any single state, it goes on everywhere.
Home ownership is such a touchstone of financial security in Australia that elections are won and lost over interest rates.
And, on the edge of hundreds of Australian towns the dozers grind away, clearing land for more houses so more families can gather around the warm glow of a 30-year mortgage.
I’m not tarring the whole sector with one brush; in fact I don’t see this as a property industry issue – it’s so much more.
The median house price in Sydney is near $1 million and in Perth, even with the resources bust it’s still about $535,000, according to Reiwa data, so explain to me how we’re still selling home ownership or a mortgage as the key to financial security?
Politicians talk about the importance of investing in disruptive technologies, in preparing our kids for jobs we can’t even imagine, let alone name.
So why is home ownership still such an essential ingredient of political success?
I have a number of friends with mortgages so enormous they may not pay them off in their working lives. They’re hoping their parents don’t fritter away all the inheritance and leave a little something for them to make that final payment.
On the flip side I have friends bringing up kids in rental properties who will probably never own their own family home.
This is the reality of house prices and wages growth in Australia for the foreseeable future.
Home ownership needs to be called out for what is it, not held up as a political sacred cow, no matter who ends up in charge after July 2.
