Gary, that sure is an interesting point about shifting bank loans from land scalping to productive business. And is probably another reason why the federal government would never contemplate it. The banks have long been called the “four pillars” and were considered even more crucial when the crisis hit. Not one bill has been passed in recent years that would displease these “four pillars”. A protected species that probably would not last five minutes in the pro-consumer banking regime of the US which they so like to sneer at.

It would follow town plans to requisition land as demand rose. Speculators on unimproved land would then get an assessed compensation rather than a manipulated market value. Land might still be sold, but it would sold into a market where the level of supply was controlled in the public interest - presumably the FHOs interests.

Just one more thing regarding Life-long leases verses mortgages, is that this would finally compel the banks to lend unsecured to SME’s , as opposed to stacking everything against their home mortage as they do, and it would also increase rabid and healthy competition between the banks.

I know there is unsecured debt on credit cards, but if you have a mortgage and a credit card, then rest a sure the debt on the credit card is secured against the equity in your home…the banks always sneak this one in without most people knowing.

BTW..it’s the SME’s that are responsible for the bulk of employment in this country, not the multie nationals or the bigger end of town companies…it’s the shop keepers, lunch bars, hair dressers, small engineering and fitting companies, small retailers etc etc etc of 1-20 people who are the salt of any economy but always draw the short straw in finance packages….perhaps Adam Schwab would have some figures on this…dunno.

There is so much that could be written on this ( but i am not a writer ) that would free up investment in business and enterprise rather than …”houses” that could change the focus and education of a nation into that..” nation of shop keepers”…mini entrepenuers who are not reliant on the “system”..but independent of big govt, banks and Big Institutions freeing them from the clock- on clock- off syndrome of slavery.

i am done

Canberra is cool.

James: hahahahehehehaha ..Will you stop it?…my sides are aching and i can’t take any more.

(((Yeah, but not in Melbourne, Brisbane, Perth, Adelaide or Darwin???…right?..hahahaha))))

ok ..I forgot Hobart…how did I forget Hobart?…stop it james, please,..I am gonna do myself an injury.

I don’t think men want a home just to please women — but a home in Double Bay? Yes, in many cases. You can see in the ABS demographics that the higher-priced a suburb is, the more proportion of young women there are. It’s probably a good way for investors to pick winning suburbs: areas with high young female population where the prices haven’t gone bananas yet.

Lots of men would rather live in the bush even if it means a lower income and simpler life. But they’d have to be prepared to live alone or come to a wife-sharing arrangement. Be OK if they’re gay, but most of the gays want to live in Double Bay too, just like the women.

Yeah, but not in Melbourne, Brisbane, Perth, Adelaide or Darwin???…right?..hahahaha

I’d have to say if you buy a girl a drink and never see her again, consider it money well spent.

(((I would also agree that there is huge pressure in Australia for home ownership. At the risk of sounding sexist, most women I know find the security of home-ownership (vs renting) a necessity in raising families. For a young(ish) bloke, thats a big motivator.)))

Are you saying that home ownership is a prerequisite for getting L — d?…would n’t that be a sad state of affairs but I fear you are right!!!

Hi Adam, those luxuries like plasma TVs are not all that they appear. In the 80s I used to eat a whole meal of fresh fruit every day very cheaply. It now costs more to buy that much fruit for a year in Sydney than to buy a 50 inch plasma TV, and yet the few farmers still standing are poorer now. What gives? Plasma TVs aren’t a mark of luxury; they are a consolation idiot box for not having what you really want, if what you really want is a decent home to call your own and proper food for your kids. I get the impression most of us were richer before the mining boom began.

It’s blasted at them day and night as a consequence of living in a consumer driven society…they don’t stand a chance.

BTW..the European leases i mentioned are “Transfereable.”…some times at a small cost and in some instances a very small and minor industry has sprung up that deal in the transfer of these leases, but it’s still much more cheaper viable for them to have an affordable life-long lease than a life-long mortgage.

No stretch there Adam.

I would also agree that there is huge pressure in Australia for home ownership. At the risk of sounding sexist, most women I know find the security of home-ownership (vs renting) a necessity in raising families. For a young(ish) bloke, thats a big motivator.

ok..got ya, but i think the situation in the ACT is different than the one I mentioned above.

In the example I mentioned above the cost of the land is not included in the actual purchase price, that part is not a cost, where as in the ACT the land cost is lumped in with the deal even though it’s only a 99 year lease…slight difference?

I think the analogy with Europe is a stretch though. Sure we could place a life tenancy here in Australia but chances are people would want to move at some stage (ie raising a family, relationship and life stage changes). Also, in Europe, the population is a lot more decentralised, so we have so many small towns/villages where people live - there is not the pent up demand in a few central locations (ie cities) that we have in Australia. This is largely due to climate (as much of Australia is inhospitable).

We simply because we don’t have the regional centres other nations have, such as the US.

I think you’ll find that in Europe, the locations which are truly sought after (ie the places that make the travel shows and the framed artworks) prices are in the millions and beyond the reach of even high income earners, attainable only by the truly rich.

The thing is how are we going to change what people want? In Australia our culture has developed around the car, the home and the westfield shopping centre on weekends. We don’t have the communal living style Europe does where your home is essentially a place to sleep - and if we did have apartments which were a lot like that, Aussie’s would look at them and sneer - “I’m not living in THAT”. It’s what we want. I wish I could shake everyone who listens to Lady Gaga or Britney Spears and tell them they are being crazy, but it’s what they want.

@JMac - I would agree that there are a lot of reasons people work harder today. The mortgages are one reason, granted. Others are the ‘wanting everything now’ as I stated before ie the plasmas, the furniture package, the bedroom suite, the dream kitchen, the travel and the latest gadgets. I also believe HECS is an issue for those starting out as it chews into your income quite heavily, as well as the fact people tend to ‘float’ through their twenties, enjoying a social life and possibly a few careers before deciding what they want to do.

There’s nothing wrong with that and the world we live in these days allows us to do it, but, like you said, everything comes at a price. You decide whether you want to live with the $80 lounge suite and 34cm TV you got at a garage sale, or you go get the interest free deal and spend years paying it off. You can get the basic 3 bedroom 1 bathroom house without the bells and whistles, on the suburban fringe, affordably.

The problem is, the suburban fringe is now almost in another state. Infrastructure and decentralisation would help this.

Nostalgia aside, the figures show people work harder now than they did in previous generations. And most of that hard work goes to paying off the mortgage.

The majority of home owners today have that privilege not because of especially hard work, but because they got in first when affordability was multiples easier than it is now. Wouldn’t you agree?

dear Ma…I am not whinging for me, but for those disadvantaged ones who continually fall through the cracks. believe me. I could buy and sell the building you work in 10 times over so i aint whinging for me, but it’s the pressure put on these poor souls by the media, behind the scenes cohersion and policy by successive govts and the police investigating the police policy and standards set by the corrupt realestate industry that make me wanna cry a river of tears

Since when is subtle cohersion not force?…besides, why are australians hung-up on the notion of home ownership in the first place?…as a nation if we did n’t have this furphy then all that money that goes into housing could be directed to business investment. If people could attain life-long leases on properties instead of soul destroying mortguages, then as in the case of Eastern Europe, italy, Spain, Portugal and many other parts of the world, then all that investment could be put to greater use in wealth creation not by clawing of the top of one another, manufacturing, employment…this is the horse before the cart and not the other way around. Even in the state of Israel you can’t own the land. Your mortgage is on the cost of the building…the land you lease from the govt and it’s nominal so the costs of putting a roof over your head are halved..less debt

sorry for all da spelling mistakes but it da bumpy car ride

I didn’t mention anything about block sizes, but you’re quite right, many of the blocks nowadays are ‘split’ in two, but comparatively, those blocks that were on the suburban fringe 30 years ago are now only 20 km’s out. The distance from the CBD adds to their value. Not to mention the house takes up the whole block nowadays.

Really? An annual salary of $4,500 in 1978? I don’t think so, unless he worked only 1 day a week. The avarage annual income back then was in the 20-30k range, and home prices were closer to 3.5 times annual income.

I’d like a lot of things in this world to change. I’m with you on this, there are a lot of messed up things in this world these days - illegal wars which slaughter innocents, pollution wrecking our planet, racism and intolerance to name a few - but sitting back and complaining about them isn’t going to change anything.

@pwnerous - Don’t get me wrong I’m not saying houses are the greatest investment on earth - the share market is also a very good investment vehicle, and actually looks better than property at the moment in my opinion. I’m not advocating property as an investment, nor am I saying everything else is terrible, I’m just so tired of seeing these people complain it’s all too hard.

The simple fact is, nobody is going to come along and give you a house. If prices fall, it will be to the detriment of the entire nation. If people really think house prices falling by 40 or 50% is going to be a good thing they are deluded. No bank will ever lend them the funds to buy one at those prices, in fact, there may not even be any banks around.

I actually think there are people out there who would like to see it happen, but I don’t think they understand the consequences of what it would mean if it did. The only way you will ever own one is to work hard, sacrifice, save, be realistic about what you buy, and take the plunge.

3x earnings is a bit of a misnomer. Back in those days the houses were at the urban fringe, with no driveway, curtains, floor coverings or landscaping, nor did they come bigger than a 3 bedroom one bathroom home. There was no outdoor entertaining area or shed, or even a clothesline, these were all added to later as people saved and did them themselves. Nowadays people want it all and want it now.

My solution was to invest in the Australian share market (long term of course). You can pick your entry level. And you can say you’re supporting — and hopefully profiting from — the ingenuity and hard work of successful Aussie companies/workers/people, the windfall gains of the resources boom, and the current strength of the big 4 banks. As opposed to bricks and home theatres.

I’d still probably prefer a house though