Gen Y Housing Market Sleeper Election Issue

Karl FitzgeraldCommentary12 Comments

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Creative Commons License photo credit: dbgg1979

Today’s Crikey had this corker:
The housing market:

Ben Loiterton writes: I am hoping you are alert to a gigantic sleeper issue building up steam in the community, although I haven’t seen any commentary from you at all.

The issue is the alienation of the entire younger half of the population from the housing market as the bubble keeps inflating due to deliberate Government policies and the relaxation of laws allowing foreign home-buyers to bid up prices.

Even though we have the most expensive (and over-geared) houses in the world, it seems all the baby boomers really don’t want a house price correction — which is not surprising give they own 95% of the equity in Australian residential assets. Also seems the banks are not too keen either now that they have given up on being commercial banks (lending to businesses) and have, in effect, become giant mortgage funds … (that in itself could be a big problem for the country if the bubble deflates!).

Most folk under the age of about 40 in this country are simmering with anger — either they cannot get into the market and are paying record rents, or they are in the market in tiny units and semis but can’t afford to upgrade to family homes when they have kids.

The resentment is starting to really boil — just see the reaction/comments to articles like this yesterday.

The Ruddites relaxation of restrictions on foreigners buying residential property to put a floor under property prices at the exclusion of Australian homebuyers is simply outrageous. More and more young people are becoming outraged by the bubble and the government’s direct support for it as all in the name of protecting boomer’s housing equity and bank balance sheets – but having the effect of financially ruining the next generation or excluding them from the Australian Dream.

This could be a big vote swinger in Gen Y, most of whom voted for Kev07. Climate change and health might seem to be the electoral issues of the day, but this generational wealth injustice is fast emerging as the main issue facing young Australians trying to establish themselves in the world.

12 Comments on “Gen Y Housing Market Sleeper Election Issue”

  1. “Most folk under the age of about 40 in this country are simmering with anger”- You said it!
    One wonders how much of the increase Violence on the streets is due to young people saying (We will never own a home) and tensions bubbling over with their folks and onto streets.

    What was with Bernard Salt the other night on ACA. He seemed to be blaming the EMO’s or Gen Y for staying home and not getting into the housing market. Perhaps Gen Y have been reading Heath Ryan’s book Pls. Just F*OFF its our turn now!
    I know my copy’s cover is as wrinkly and battered as a Baby Boomer real estate auctioneers face, from too many decades in the economic sun of their cheap credit fuelled inflationary housing boom.

  2. well said Ned!
    They always blame each generation as being lazy, it’s a total beat up. If anything the decades of high growth, low returns for the working people have led to the disillusionment, let alone that lobbyocracy renders democracy a farce.
    that last line of yours demands that u write us a poem of some sort i reckon! would sound tops on the Renegades

  3. Thanks Karl,Your right about the beating up on younger generations, I say where their is no oppotunity their is no motivation, the Boomers by fact keeping this bubble going, are demotivating and creating a Mexican stand off with all younger generations, and the lack of awareness of Boomers fail to see generations dont always have to achieve more GDP to be highly effective in tackiling the pressing issues but can achieve differently,

    Thanks again Karl I will call you soon about the campaign- Here a poem about the Iraq Inquiry

    Poem

    O Zion, Zion, khazars thirteenth tribe.
    Blairs drinking beers at the snow dome, oil money and bribes.
    Im reading Arthur Koesler at the cube of confusion.
    M16 is on the phone, its all an illusion.
    burn out mecedies in the desert of hades.
    British machine guns, bullet proof vests, it’s one big mess
    their heading up the euphrates.

  4. I think if your in the age of 22-32 – its just bad luck, everyone befoe this, my older brothers and cousins all bought places at normal prices. There houses are all now 2-3 times the price now which is crazy!!

    bubbles do burst, eventually, but i think it may be in a few years, so its just bad luck for this age group.

    I am heading off overseas , where I can earn more and actually afford a place (nothing special, i am realistic for my first place, just want an avergae place in an average area AND PAY AVERAGE PRICE!!!!!!!!!!!!!!!!!!!!!

    thats the only option i see

  5. I have to disagree with both of you now, though 12 or 18 months ago I would have gone along with the superficial appeal of your “greedy baby boomers” argument.
    The real problem is innumeracy. Any bozo with a basic knowledge of compound interest and a calculator should have been able to work out that 10% pa house price inflation was unsustainable. Instead the baby boomers (with some help) delude themselves that it’ll continue forever. But Gen X/Y have been even more stupid over the last 12 months as they’ve taken on hundreds of thousands in debt, all for a measly $7000 and a few percent off their interest rates in the very short term (the worst “introductory offer” I think most of us will see in a lifetime.) They’ve made their largest lifetime investments in an asset with substantial risk of declining value, even after watching millions of people and a few countries lose the lot on the same asset class in every comparable foreign country!

  6. The rise in house prices also puts a floor under politicians own housing investments as many have property portfolios across State and Federal government – it is selfish and ill thought out policy and to invite foreigners that have no stake in Australia into the housing market to stimulate the already overheated housing market goes beyond the pale. The idea that these twerps want Australia have a population of 30m without having an idea how to plan for it is scary.

  7. Not all ‘baby boomers’ were in this swill of a Ponzi scheme. Could we cut out the stereotyping of generations please. Remember for a start that some ‘baby boomers’ got into the Ponzi scheme, in housing, the stock market (meaning the casino), and so called superannuation on the advice of younger people, the masters of the universe, who came out of business schools. And some ‘baby boomers’ are angry too – by not getting into ‘it,’ thinking it was dubious to say the least, they too are now priced out of the housing market; yes, some of them. Let’s address the problem, a Ponzi scheme substituting for real work, instead of categorizing people and then bashing anyone who fits into the demonized category regardless of their actual actions. Yep, I’m a so-called ‘baby boomer’ and I’d LOVE to see a very large ‘correction’ in the ‘housing market.’ And, I’m angry about it, not because I missed out, but because it should NEVER have happened in the first place.

  8. Over the last 30 years we have seen the economic rationalists hand ultimate power to the financial industry (not that they weren’t trying pretty hard on their own). It’s convenient to blame the boomers but people pretty well do what they’re told in this slavocracy; if they don’t do what they’re told they get pushed. If you want to blame the boomers for something how about for giving up on ‘free love’ and ‘peace’ and becoming the conservative rationalists that decided it was easier to let markets make the tough decisions!

    The blame for the housing bubble falls directly on the big four, the treasury and the ATO (and Paul Keating for deregulating); but do you really think it wasn’t going to happen anyway?

    Thomas Jefferson understood this:

    “If people allow private banks to control the issue of their currency, first by inflation, then by deflation, the banks will deprive the people of all property until their children wake up homeless on the continent their fathers conquered. The issuing power should be taken from the banks and restored to the people, to whom it properly belongs.”

  9. Don’t just stew about it, DO something about it!
    Someone should take up the issue and run for a seat in the senate next election. You are guaranteed to get elected. I have certainly thought about it, but would not like the spotlight. I would prefer to be the researcher/secretary. So if anyone wants a seat in government, this is your opportunity. I need a change from teaching.!
    Isabelle

  10. Great to see some passion about this key issue. Generational attacks are always open to be shot down for their ….. generalisations. The key to why this should never happen is the financialisation of our economic system. People need to study the levers that drive our behaviour – the tax system. What directs our behaviour in the most positive manner with the least side effects? Please take out a trial subscription to our magazine, subscribe to our weekly Renegade Economists podcast and/ or join the e-news (home page, RHS).

    We are making inroads in political spheres, whilst building the groundswell. Both left and right see the merits in this approach – from the ‘radical centre’.

  11. There’s gotta be something wrong with a country where it costs more and more to hang a roof over your head (so that you spend your whole time away from it at a job so that you can pay for it) than it does to feed and nurture your own temple. I can tell you now, from my little rented duplex in Canberra, that I was just as surprised as my Sydney well-wishers when it turned out that it would not at least be easier to buy my own bit of land in our nation’s capital. It may not have waterfront, but it’s a speculator’s paradise – location, location, location, and there is none better than in the shadow of the taxpayer’s wallet. Wherever there is publicly funded largesse, there is sure to be some land-banker earning money in their sleep, easily taking more than what they gave in taxes

    Let’s not forget it’s about the private monopoly of location. And while the self-proclaimed elite of every age have always gotten fat from economic rent, that surplus that all of us have had a share in creating but not receiving, the baby boomers are at the crest of that wave. But I agree that its not just the Woodstock generation that has sold us out. Let’s just rephrase ‘boomer’ to refer to anyone regardless of age who is aiding and abetting any kind of Ponzi scheme foolishness. And more than likely profiting unjustly at the expense of others in the process.

    The irony in my case is that I am now contemplating buying my own home only because one of the generation of ‘baby boomers’ has recently died. I doubt I’d be even thinking about it, despite my public service job and young family, without it.

    I’d definitely vote for that kind of party in Senate. But instead of a single issue ticket it should encompass all kinds of parasitism on economic rent: mineral resource rentals, electromagnetic spectrum holding fees, relaxation of copyrights and patents, carbon cap and dividend.

    I might even run on that ticket …

  12. Eventually market forces will dictate and a price correction will occur, Government and the RB will try and do what it can to limit the deflation.

    Unfortunately as long and corrupt banks are allowed to print cheap money out of thin air then prices may continue to go up for a while.

    One thing is for sure and that is greed always ends in disaster, the end game for the Australian property market is blood on the streets.Picking the timing is difficult as it may happen quickly if we have a 2nd dip global downturn or over the next 20 years progressively.

    In the meantime rent and save, I’m sure as hell not paying rent to those criminal bankers. All we need is a youth movement to encourage the youth to work hard,save, consume less and to NOT take out a home loan and prices would CRASH.

    Peace and God bless

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