"Another Baffled Australian" torpedoes the Australian Treasurer, in what should be a must read for every American, Briton, and pretty much anyone thinking of implementing Smart Growth, aka Smart Death
AUSTRALIAN TREASURER GIVEN PRIMER ON HOUSING ECONOMICS
"Wodonga (Victoria) mother of two Mel Wilson has made headlines across Australia with an open letter to Federal Treasurer Joe Hockey on housing affordability. In commenting on Australia's housing affordability crisis, the Treasurer has told a press conference "The starting point for a first home buyer is to get a good job that pays good money."
Australia has a severe housing affordability problem. As the Demographia International Housing Affordability Survey showed in January, Sydney median house prices had reached 9.8 times median household incomes of by the third quarter of 2014. In the intervening months house prices have escalated so much that some say the median price will soon pass $1 million."
Well, of course they have a problem, there is no available land. Australia is a tiny island land, and we all know they are not making any more land! Hold on, Maddogswif was reading over my shoulder, and now she is standing at my side, tapping her toe, hands on hips, giving me "The Eye." Gulp!
Apparently, Australia is huge, not so much an island, but an entire continent, who knew! On the globe, Australia is really isn't much bigger than a mini-bagel, how was I supposed to know?
Still, it is relatively small when compared to the US in size, weighing in at a measly 2.97 million square miles. While the US minus Alaska is a whopping 3.14 million square miles! Dude, even my Spiderman like lawyer math senses tell me these numbers are "similar."
The US is 3.14 million square miles inhabited by 320 million souls, Australia is 2.97 million square miles, inhabited by 23 million souls, and Australia has a catastrophic housing crisis due to a lack of available land? No, This is a political crisis driven by some the local Australian version of "The Worst Political Class in History" syndrome.
While I try to address these issues humorously, they are simply not humorous. The Boomers, regardless of nationality, are the most venal, self serving, money grubbing generation of humans to ever inhabit this or any other planet. They got theirs, so they are closing the gates so you cannot get any. These "Smarty (pants) Growth" policies are designed to drive up home prices, allowing the Boomers to maximize their wealth. Boomers are, regardless of nation, not paying for their tax bills, allowing tax expenditures to rapidly outpace tax revenues. In the end, these policies will saddle the young Millennial generation, and younger generations (the children, and grandchildren of the Boomers) with these unpaid bills, and exorbitant housing prices, among other problems. You know, the same people who now cannot buy a home because of the absurd prices due to the Boomers greed, and venality.
Australia is a vast area, of which, perhaps 1% is developed, yet "the land must be protected." This is a cult.
"Letter from Ms. Mel Wilson to Treasurer Joe Hockey:
I just wanted to touch base with you regarding your comment that young people are able to enter the property market if they just “get a good job that pays good money.”
I just wanted to ask you how one might go about this?
Are you going to be reviewing all the current Awards that are in place to ensure that most jobs pay “good money”?
Are you going to be creating hundreds of thousands of new jobs that, under your Awards, pay over $100,000 per year?
Apologies if I have missed this fantastic news, but as someone working in 2 senior HR roles, I believe I would have known about this so that I could pass the message on to some very tired, over qualified employees who currently fall under various Federal and State awards and are being paid between $18 to $25 per hour.
Are you aware of what the average Australian wage is?
Are you aware of what the average Australian mortgage in Sydney is?
Are you aware of the first-home buying process?
Just in case these facts and figures aren’t available to you, I thought you might be interested.
The average weekly wage according to the Australian Bureau of Statistics on 1st January 2015 was $1,128.70, or $58,692.40 before tax. This means a take home amount of about $904.00 per week.
The median house price in Sydney, according to the Domain Group Housing Price Report, as of March 2015, was $914,056.
Not sure if you know how first home buying works at the moment, but you normally need a deposit of about 20%. This is to pay for the Stamp Duty (which is a State Tax you must pay every time you buy a property), and also to assist in the approval process so that you don’t need to pay Lenders Mortgage Insurance.
So in this instance, the first home buyer would need about $182,811.00 saved to purchase a house that is the average price in Sydney.
So to go out and get one of these “good jobs that pay good money” I assume these young people you speak of would need to go to university first.
On average, it takes about 3 -4 years to get a degree, so if a young person goes to University straight out of school, they can expect to finish their course and be ready for the workforce at about 21, with a HECS-HELP debt of over $20,000. To make this a bit easier for you to understand, let's say there is a young person named Joe Junior who has done just this.
If Joe Junior is extremely lucky, and is up there with the best of the graduates from that course and that year, he will get a job straight out of University paying usually under the average wage.
However, lets just be extremely generous here and say that Joe Junior got a job and was on the national weekly take home wage of $904 per week.
Joe Junior needs to only save every single dollar worked for about 4 years to save his $182,811 deposit for their first home. Thank you, Mr Hockey, for throwing in that $7,000 first home owner grant too – that meant Joe Junior could get into his first home 8 weeks earlier!
Just a quick side note, this example does not take into consideration the rising house prices, or Joe Junior’s HECS-HELP debt that he obtained from getting his degree to get one of your so-called “good jobs”.
Joe Junior is now 25 (not so junior anymore), has been living at home with his parents this entire time and has not been able to spend a single dollar on any bills, board or holidays or public transportation. He also can’t afford a car or petrol for a car but then again “poor people don’t drive cars”. Oh wait, Joe Junior isn’t a poor person – he has a “good job that pays good money.”
Luckily Joe Junior’s parents have been happy to drive their little Joe Junior to and from work every day and provide free housing, clothing, medical expenses and also provide the food for his breakfast, lunch and dinner each day.
So finally Joe Junior has saved his $182,811 deposit (of which only about half will go towards his mortgage due to the stamp duty cost), and can now purchase his first home, with a mortgage of about $822,650.00.
According to the Commonwealth Bank’s online mortgage estimator, the repayments for a mortgage of this amount are $1,073.00 per week over 30 years.
So hopefully Joe Junior’s average weekly wage of $904.00 has gone up enough to cover the cost of the mortgage.
Joe Junior has been applying for these “good jobs hat pay good money" that you speak of (I assume by "good money" you mean more than the average wage as you have just seen it is not even enough to cover the cost of the average house prices' mortgage in Sydney), but hasn’t had any luck as yet. He needed to stay in the same job post university to demonstrate to the bank job stability so that he could purchase his first home. So he only has a degree, and experience in the one job, one industry, and there are just not that many jobs out there paying “good money.”
Joe Junior now also can’t wash his clothes, eat food, or get to and from work as he no longer lives with his parents, so getting one of these “good jobs” is even more difficult.
So Joe Senior, are you really aware of all the facts and figures when you says things like buying your first home is “readily affordable” to young people?
Just slightly confused as to what you were thinking when you said these words at the media conference in Sydney.
Looking forward to another one of your politically correct, direct and well thought out responses.
Another baffled Australian"
Go get 'em! The only way this will stop is if each and every one of us consistently attacks these puerile ideas every time we encounter them.
How long before we hear actual calls from the Millennials to, "Grab your torch, and pitchforks?"