Monday, March 30, 2015

The family home myth

We have an obsession with property.

Constant chatter and media stories about the high cost of our housing, its unaffordability - especially for first home buyers.  The xenophobic and inaccurate complaint that it's all the fault of foreign, usually Chinese, investors. The probability of a bursting housing bubble. And 'the family home'.

With stupidly low interest rates combined with tax concessions for property investors there's bound to be high pricing.

But added to the mix is the fact that 'the family home' is in fact an increasingly rare thing, almost to the point of extinction now.

We actually treat 'the family home' as nothing more than a commodity to buy and sell to make a profit.

Example again this weekend. In addition to the properties for sale by private treaty, in Sydney there were 1,128 auctioned. Something approaching a thousand is a perfectly normal weekend.

Australia wide there are around 11 million residential dwellings, and about 600,000 are transferred every year. So the equivalent of the entire continent's housing stock changes hands every seventeen years. That's extraordinary turnover of 'then family home'.

Unless that changes - which it won't - even sensible interest rates won't have the effect we need. So we've brought the problems upon ourselves.

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