Pete Muskens, a 71‑year‑old retired architect from Melbourne, has watched Australian homes transform from places to live in to money-making assets pushing younger generations to the brink. He bought his first terrace house in Melbourne in the early 1980s for about $30,000 – less than three times the average annual wage at the time – a level of affordability that is unimaginable for his two adult children. Muskens worries that the decades-long housing crisis has reshaped family life and delayed milestones for younger people, like independent living and starting a family.
It’s an unhealthy social effect of what we have in the housing market,” says Muskens. He says the government’s recent property tax reforms to negative gearing and capital gains tax were long overdue, and represent a crucial step in transforming a house back into a home by reducing investor incentives. The Coalition has vowed to repeal the changes if it wins government, while One Nation wants to overhaul the reforms. nts, grandparents, and great-grandparents are looking back at the ease with which they bought their first homes, and questioning whether the country’s decades-long slide in affordability can be reversed for the sake of younger generations.
Charlie Bell, a retired scientific researcher, bought his first house in Canberra in the mid 1980s for less than three times his annual income. The Howard-era decision to halve the rate of capital gains tax made dwellings even more attractive to investors, while a string of state and federal governments failed to plan for supply shortages. Labor’s budget reforms were enacted at a complicated time, given they have magnified property price falls triggered by rising interest rates and a tepid economy.
Sydney’s property market has led the declines, down about 7% from its peak recorded earlier this year according to Cotality data, with the largest falls reported in the high end of the market. Other state capitals, such as Perth and Adelaide, remain robust. The price pullback has nonetheless created a political firestorm raising questions over whether Australia is really comfortable making any housing reforms that could take heat out of the market.
Richard Jones spent his career watching his property surge in value alongside those owned by his generational peers. But the 60-year-old Melbourne marketing manager says the price rises have come at a steep cost. While Jones’s three adult children, aged in their 20s and early 30s, are all well educated with good job prospects, they have collectively abandoned the idea of affording a place of their own.
One of his children is even considering moving overseas, in part to escape Australia’s high housing costs. Yes, I’ve worked hard, but no harder than anyone else. Why shouldn’t that be available to everyone?” In the early 1990s, it took roughly six years for an average household to save a 20% deposit for a typical dwelling, according to analysis by the Grattan Institute.
Extract — continue reading at the source.
