First Home Buyers Have Everything Except One Thing!

This week has been an interesting week in the world of property and real estate reporting.

We were ranked number 10 in the world for the rate or speed of property price growth. We were ranked as a country which allowed the media to spread the hysteria by spinning what is largely a Sydney based issue into a national one. Nothing new there really so lets all just carry on living our lives. Well it wasn’t that easy.

Our treasurer made comments which the “Industry of Outrage” (thanks Mark) simply devoured. His comments were in response to those of the RBA chief .

We (all of us here on pi.com) after being investors for many property cycles understand that monetary policy is not the only tool used to douse down the fire of what is “speculative property investment”. The words or comments used by the RBA are all carefully planned and deliberate. So too are our treasures responses, at least when standing in an organized press conference spouting pre written sound bites.

This manufactured difference in opinion created the perfect property story. Bubble, bubble toil and trouble (Sorry Will).

Still bubbling away the story itself, perhaps growing faster than the Sydney market, has taken a turn.

We now have and whole host of “Joe the plumber” style stories (interviews with FHB’s) telling our treasurer just how hard it is. The type of thing that goes along the lines of “I work 80 hours a week with a good job and still can’t afford property” queue the sympathetic editorial.

Don’t get me wrong. Sydney real estate is expensive but has it really ever been any different? The stories annoy me only because they are the same stories from the last property cycle. Exactly the same. It was like being thrown back in time. There are many, many things we could do to address supply and affordability but there is an endemic inertia to change that perpetuates what is largely a “sticky” market.

There are prohibitive entry and exit costs that mean the wrong people live in the wrong homes for too long creating pent up demand for the wrong types of property.

We as investors will cop just about any media guff about property. We plan our investments and largely ignore the noise around which particular part of the cycle we are in and what it means for us.

However, it hard to cop an argument that starts with the premise that we are at the top of a perilous real estate cliff and when the bubble burst ( as it certainly will ) property prices will tumble and the world as we know it will end…so that exactly why you “Joe or Jane the plumber” will NEVER be able to afford Sydney property. Really? That doesn’t sound right does it? Oh well it was on the news so I will just accept it, keep playing candy crush and spend all my disposable income on questionable consumer items because I cant afford property. Oh wait…no they are right I will NEVER be able to afford it.

We can’t have it both ways. If a correction is imminent then affordable housing (or at least more affordable) is just around the corner and FHB’s simple need to wait and save a little longer.

That is why first home buyers as portrayed in the media have everything except…patience.

Heaven forbid we actually remove barriers to entry, limit local government control over the supply of housing and “build, build, build” the right homes in the right places for the right people.

• This topic was modified 8 years, 10 months ago by  Don Nicolussi.