Straight answers on housing affordability

Just back from London, where gay marriage is cool and first-home buyers haven’t got a hope in hell of buying within cooee of the centre of town.

Gays have been tying the knot there legally for more than a year and the latter has been accepted for decades.

But Australian voters have spoken. They won’t tolerate being denied marriage equality – or home ownership. The June Fairfax-Ispos poll showed Tony Abbott might lose his job unless he acts on both.

But bringing Australia into line with England, Wales, Scotland, Ireland, New Zealand, South Africa and many American states on gay marriage could be easier than solving what’s, in the space of my month offshore, been labelled Sydney’s “housing affordability crisis”.

But Sydney property prices have been spiralling for years. Up 40 per cent in three years. “Experts” constantly emerge claiming to have “the answer”. End negative gearing, build more affordable housing, stop stamp duty, let young people access their super … blah blah blah. None of it likely. 

Perhaps the more grown-up response is … there is no answer. Let’s recognise that Sydney is now an international city, like New York and London, and young people will have to rent if they want to live in the inner city or move to the outer suburbs. Or the country. Alternatively beg, borrow and steal from Mum and Dad – or, “get a good job with good money”.

As Meriton boss Harry Triguboff told me this week: “If you compare us to London or New York we are not dear … but frankly I could not give a damn what they charge in New York, Americans are irrelevant because they don’t buy my apartments,” he said.

But it’s only the Chinese he cares about. “They told me that we are cheaper … that is one of the reason they come to buy here.”

We’re certainly cheaper than London. Sam Ball, of Frank Harris & Co of Bloomsbury in central London, says young married couples – gay and straight – have little hope of purchasing there either.

“We sold a split-level penthouse apartment in South Bloomsbury to a first home buyer about two months ago – she paid £1.35 million [$2.7 million] cash, so she is not really your standard run-of-the-mill first home buyer,” he said.

Generally, he says first home buyers are “very unlikely”, with a tiny one-bedroom flat within 6.5km of central London costing the equivalent of more than $1 million. Incidentally, you can pick up one-bedders for half that in Sydney’s inner city. For example, Domain Group figures show 10 sales of one-bedders in the past year in Zetland under $500,000.

And BIS Shrapnel research this week suggested that because of today’s historically low interest rates, homebuyers are actually spending far less of their income on their home loan than 26 years ago – 36 per cent now compared with 50 per cent in 1989.

But let’s cut to the chase – it’s the fast-escalating asking prices and whopping deposit that’s the real “problem”. Harry Triguboff’s solution? “I would say that people should be able to use their super fund when they are young – what’s the use when they’re old if they haven’t been able to buy property?” Yes, we’ve heard that one before. And he thinks it would be just super if you’d buy one of his apartments. 

But can’t prices just be cheaper, especially for first home buyers? Don’t be fooled by that recent State Government announcement of “affordable housing” in Glebe. That’s affordable housing for renters, silly. Don’t count on the 250 apartments up for sale being much cheaper than any other inner-city address. Millionaires sit quite happily with social housing tenants in Redfern, these days.

And do you really think any government’s going to end incentives that help most of their rich voters or boost their own coffers? That’s a record $5.1 billion so far this financial year, remember. Frankly, you’ve got a better chance of gay marriage getting up.