Some people will kill for a bit of free publicity. The first thing to be murdered is the truth, in the quest for cheap limelight.
In real estate, a perennial favourite among those who seek media profile is the affordability crisis. This is a ripper yarn because it tugs at the tear ducts of all Australians whose hearts bleed for desperate young couples who can’t afford to buy a home.
It’s rubbish, of course, but the truth is always optional in these kinds of storylines.
First, here’s the reality. The past year has been the best time ever to be a first-home buyer in Australia. The level of government assistance has never been higher and the cost of finance has never been lower. And investors have been fence-sitting so first-timers haven’t had a lot of competition.
And young home-buyers have responded in record numbers.
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Yet, despite all of that, there are organisations who have managed to construct a scenario where no one can afford to buy or that prospective first-timers have to save for 10 or 12 years to cobble together a deposit for a meagre dwelling.
Here are some recent headlines from mainstream media:-
– “Policy failures see houses become unattainable for young Australians”
– “Australian housing affordability worsens amid fears proposed safe lending laws repeal will lead to debt disaster”
– “Tensions in housing market as affordability worsens”
– “First home buyers take 10 years to
save for a deposit”
– “From down payment to dealbreaker: Average
house deposit now exceeds 100k”
Those last two screamers are the biggest lies.
How do they concoct such scenarios, at a time when FHBs are out there buying in such large numbers?
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Very easily, so as long as you’re not bothered by a conscience. You simply create a formula in which every component is a work a fiction.
Here’s the proposition they put forward:-
– How long does it take the average young couple on typical incomes to
save a 20% deposit to buy the median-priced house in Sydney?
It’s difficult to imagine a scenario more distant from the reality of most FHBs across the nation.
Here’s why …
– They stipulate a 20% deposit. Nobody saves a 20% deposit. You don’t need to. You can currently get into a first
home with a 5% deposit without having to pay mortgage insurance.
First-home buyers don’t buy median-priced properties, not in Sydney or anywhere else. They buy in the lower price ranges.
– Why houses? Many young Australians prefer
apartments and not just because they’re much cheaper. Why do these fictitious scenarios never insert apartments into the equation?
– Why this focus on our most expensive? Why not Brisbane or Perth or Adelaide?
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So here’s a realistic equation to give a true appraisal of the prospects for young buyers: how long does it take to save a 5% deposit to buy a house in the lower price quartiles in Brisbane?
Or how long does it take to save the required deposit to buy an apartment in Adelaide or Perth or Hobart?
Or, given the predominate trend in Australian real estate, how long to save a 5% deposit to buy a house in Orange or Wollongong or the Sunshine Coast or Bendigo or Geelong?
Those are scenarios that equate to the reality faced by most prospective
But you will never see that equation presented in mainstream media, because it doesn’t serve the desired outcome: a screaming negative headline, with the truth optional.