A Minute with Magnus
The definition of “affordable housing” is also changing as we have this conversation. Affordable housing was once what someone on a low to moderate income could actually afford to pay in rent (mostly seen as a maximum 30% of income for the bottom 40% of earners). It then became, with the introduction of NRAS (National Rental Affordability Scheme), a discount to market rental of 20-25%, which is of course still unaffordable for many. Affordable housing in today’s conversations seems to be much more centred on affordable purchases, particularly for moderate income earners. It is probably true today that a young professional couple earning $150k between them will still struggle for many years to try and pay rent as well as save a 20% deposit.
Investors have finally overtaken homeowners as the primary purchasers of houses, a first in Australia’s history. This is a huge social shift. I don’t have the expertise to comment on the housing bubble, real or imagined, but I do know that there is a big difference between someone buying a house and someone buying a home. This shift is seeing an increasing army of renters shuttled around the suburbs of Sydney, moving on as properties are sold and resold or as the ever increasing rental burden becomes too much to bear. Short and insecure tenancies, spiralling rents and landlords often not interested in being landlords but just getting a capital return on investment. Others are left behind all together as real estate agents have far too many applicants to deal with any that might be perceived as difficult in any way.
Sydney and Melbourne are engaged in a long and drawn out process of self-asphyxiation, where essential workers so needed by our services and institutions need to travel at least 3 hours a day to get to work and then told they just need to get a better paying job. The institutions themselves begin to suffer as they find it difficult to attract lower paid workers who are willing to travel and then equally difficult to keep them as they keep dreaming of working closer to home. The day we realise that housing is not simply an investment we can use as a tax deduction, but vital infrastructure that keeps not just families but our city going, well… that will be a good day.