Housing Shortage

[red750]

There is a large outcry at the shortage of housing accommodation, both rental and new homebuyers. But is the government, all governments, addressing the problem correctly?

 

Since 2021, over 2000 home builders have gone into liquidation, two in just this last week in Victoria, including some of the biggest. The problems have been shortage of tradesmen and supplies, with some builders more than $2 mil in debt.

 

But the government(s) want to force older homeowners to downsize, and add additional taxes onto landowners who are not developing the land they own. With builders going out of business, who is going to develop this land to provide the housing? Where are the building materials coming from? These additional taxes add to the inflation, which will increase interest rates, further complicating the problem, making homebuying more out of range and rental rates out of the reach  of people who already can't afford to rent.   

[facthunter]

SO what would you do it you were the government? The going bankrupt is due to the materials prices increasing after the job has been quoted and commenced So to complete the job without adjustment allowances the firm must do  so at a loss.   Nev

[spacesailor]

BUT

At no stage is those " bankrupt " builders ' out of pocket , they hide their " assets  & start again with a different company name .

 

The owner who is locked-out, cannot , even sell their block to repay their creditors . Or try to Finnish the job to liveable condition themselves. 

spacesailor

[octave]

2 minutes ago, spacesailor said:

The owner who is locked-out, cannot , even sell their block to repay their creditors . Or try to Finnish the job to liveable condition themselves. 

 

We had a house built in 1990 (NSW) and the builder went into liquidation.   We were covered for the cost of completing the house. I can't remember the name of the scheme back then but in NSW it is now called Home Building Compensation Fund (HBCF)   In our case the house was 75% finished so we got our owner builders licence and finished it ourselves and ended up financially slightly ahead.  It did cause delays but nothing too drastic.

 

DEALING WITH A BUILDER’S BANKRUPTCY: YOUR ACTION PLAN

 

[red750]

How about a little more carrot and less stick?

 

Reduce land tax if the property is developed rather than an additional unused land tax. I know that doesn't solve the builders situation or materials shortage, but it's a start. Oh, that's right, it doesn't solve the revenue grab.

[spacesailor]

A house further up this road has had ' all the frame-work taken down & stored on sites ' awaiting the  " administrator "to recoup something for the creditors. 

All tightly locked up with a police drive by nightly. 

spacesailor

[old man emu]

The scarcity of materials is a flow-on from the disruption to world trade caused by COVID. COVID reduced production, and reduced the means of transport. Then we copped rampant inflation which upped the price of newly produced building materials.

 

Of course the bigger the house you build, the more materials you need. How many of us grew up in a 10 to 12 square house (about 100 sq m)? Nowadays a 3-bedroom house is about 20 squares.

[red750]

We were surprised recently when the framework of a new house popped up in our area - it is single storey. At least a dozen other homes built locally in the last year have been two storey, including our next door neighbour, photo below.

 

[willedoo]

19 minutes ago, red750 said:

We were surprised recently when the framework of a new house popped up in our area - it is single storey. At least a dozen other homes built locally in the last year have been two storey, including our next door neighbour, photo below.

 

It looks like an old bank or library building.

[red750]

3 minutes ago, willedoo said:

It looks like an old bank or library building.

Newly built - they moved in at Easter. A number of homes like this built recently. Builder is Metricon Homes.

[willedoo]

10 minutes ago, red750 said:

Newly built - they moved in at Easter. A number of homes like this built recently. Builder is Metricon Homes.

It reminds me of my niece and her husband's house, a big imposing structure with columns. I think they called it French Provincial style.

[spenaroo]

We are all f%ked,
was talking to a friend. we are both early 30's with sibling that are mid 20's.

we are lucky to have barely gotten into the market.... and there is a question mark for me as I still need to buy another place after the compulsory acquisition.
but there is no hope for our younger siblings. and its only a few years difference.

Im yet to hear a solution to it. but be ready for the generation wars, its already started.

personally I would like to see the property and pension means tests changed.
at the moment your primary residence doesn't count. so if your in say a 3 bedroom house. and move to a 1 bedroom unit.
pocket 1 million.... you get penalized for the increase in savings.

just as we cant afford to upgrade, people cant afford to downgrade.

the whole system (including tax and negative gearing) needs a major overhaul, not just some promised funding in a one off benefit

Edited October 5, 2023 by spenaroo

[willedoo]

It's all out of proportion now. Back in 1988 when I bought my vacant block to build on, in this district the average block was equivalent in price to one year of average income. The very cheapest blocks are now the equivalent of six to seven years average 2023 income. On top of that is the proportionally huge increase in building cost. Just as a side note to those 1988 figures, it's a popular coastal area, not out in Woop Woop. Within a couple of years of buying in 1988, prices started to gradually climb and hit warp speed during covid with the influx of Victorian refugees.

 

The Genie is out of the bottle now; it's hard to see future housing affordability for the younger generations. Home ownership used to be a big thing to aspire to in this country.

Edited October 5, 2023 by willedoo

[Marty_d]

It's not going to be a simple solution,  there will have to be several concurrent lines of attack. 

Somehow housing needs to shift from being an investment to being somewhere to live.

I'd like to see a scheme where the government builds greenfield houses and co-owns them with residents who can pay down their share then buy the other half from the government.

[red750]

I have a 4 bedroom house. My son and daughter (both not married) live with me. My son works two days a week from home. I bought the house in 1978, long since paid off. When I go, they will inherit, as there is no way they could get into the market. Median price in our area for 4 bedroom houses is $1.3 mil, although most are younger than our 50 odd year house, so it would be well below median. Needs a bit of work.

[facthunter]

Australian houses are now the world's Biggest. That's part of the problem. I've lived in laundry's, garages and bungalows that many would be too snobby to live in. But I'm supposed to belong to the group that got it all easy. Most houses are built with taxed money for the ordinary person. No lurks there for them. Not furnished or finished painting  Curtains and carpets for years.   Nev

[spenaroo]

39 minutes ago, Marty_d said:

It's not going to be a simple solution,  there will have to be several concurrent lines of attack. 

Somehow housing needs to shift from being an investment to being somewhere to live.

I'd like to see a scheme where the government builds greenfield houses and co-owns them with residents who can pay down their share then buy the other half from the government.

problem is my parents generation were all told to invest in real estate and use it to self fund retirement.

they have done exactly what they were told to do. especially anyone with self managed super.

I know my parents are looking at more investment properties because they have to - literally have to, they have penalties if they don't due to restrictions placed on self managed super.  sad thing is we are looking at the same properties

the overlap between entry level and investment properties is huge. 1 and 2 bedroom units the supposed entry level property is also the ideal investment (strata managed, minimum upkeep, single tenant, high rental rate etc...)

wonder how this country would have evolved if this was invested into infrastructure and business instead through superfunds etc...
use the money in the real estate market to invest in business

Edited October 5, 2023 by spenaroo

[facthunter]

You could make a case for that.  Nev

[red750]

3 hours ago, facthunter said:

Australian houses are now the world's Biggest.

These houses were built within the last 12 months or so, and are within 1 km of my place, in just TWO streets. If I had gone around a few more streets, I could have photographed more than a dozen just like them. They were all knock-down/rebuild, and does not include town houses or second storey extensions.

 

[red750]

Here's one for the books.

[facthunter]

BIG Houses for People who need room to keep  away from each other?  My Larg(ER) house was to let me sleep for shift work. You can have visitors stay without tripping over them also. Today I'd be happy with a renovated corner of a good  strong SHED or live in an Industrial estate.  Nev

[onetrack]

They're not houses, they're mansions - designed to take maximum advantage of the tax-free status (and capital-gains-tax-free advantage) of the "family" home. There needs to be an upper limit on what classifies as a "family home".

It's a no-brainer for wealthy people to pour $5M into a "family home" and reap multiple millions in tax-free gain in years to come.

[Jerry_Atrick]

Sometimes I think you fellas forget what its like to have teenagers at home.. Our house has over 20 rooms, and sometimes it's not enough..

 

Yet it is worth less than the 3br home we sold in London 9 years ago!

 

[old man emu]

My wife and I brought up our two kids in a 10 or 11 square 3-bedroom, single garage house. We had a big backyard and front yard, mainly because we were on a corner block. Now I look at the houses in the new developments near where I used to live and there are those two-storey places with no front or back yards. Those houses all have at least double garages, but their cars are always parked outside because the garage is full of the overflow of stuff they need "to get away from it all". The new houses are so much bigger simply because of marketing. Back in the late 90s new houses had to have a spa bath in the bathroom. In to 2010s new houses had to keep the spa bath but add a theatre room. Where did the demand for these come from? Not the architects. It came from the Sales Department looking for that bit of one-upmanship that would make the sale.

 

We wonder how the Brits can live cheek by jowl as they do. I bet the Brits wonder why we need such monstrously huge dwelling that we dream of escaping whenever there is a long weekend.

 

1 hour ago, Jerry_Atrick said:

Yet it is worth less than the 3br home we sold in London 9 years ago!

Admit it. The worth of your 20-room place in the country is not in the monetary value, but in its lifestyle value.

[red750]

When you get older and arthritic, you have to install a home lift or stair lift.