Dear Mr Hockey, Victorian mother Mel Wilson has something she would like to say to you…
Earlier this week, Joe Hockey, North Sydney MP and Treasurer of Australia said, “The starting point for a first home buyer is to get a good job that pays good money.” He added, “If housing was unaffordable in Sydney, people wouldn’t be buying.”
Mel Wilson is a 28 year old single mother from Wodonga with two children (aged two and five) and two part-time jobs in human resources. In a Facebook post that has already been shared over 24,000 times, Mel has written an open letter to Mr Hockey, articulating the thoughts of seething Aussies everywhere.
The letter is too brilliant not to share, so here it is in full:
Dear Joe,
I just wanted to touch base with you regarding your comment that young people are able to enter the property market if they just “get a good job that pays good money.”
I just wanted to ask you how one might go about this?
Are you going to be reviewing all the current Awards that are in place to ensure that most jobs pay “good money”?
Are you going to be creating hundreds of thousands of new jobs that, under your Awards, pay over $100,000 per year?
Apologies if I have missed this fantastic news, but as someone working in 2 senior HR roles, I believe I would have known about this so that I could pass the message on to some very tired, over qualified employees who currently fall under various Federal and State awards and are being paid between $18 to $25 per hour.
Are you aware of what the average Australian wage is?
Are you aware of what the average Australian mortgage in Sydney is?
Are you aware of the first-home buying process?
Just in case these facts and figures aren’t available to you, I thought you might be interested.
The average weekly wage according to the Australian Bureau of Statistics on 1st January 2015 was $1,128.70, or $58,692.40 before tax. This means a take home amount of about $904.00 per week.
The median house price in Sydney, according to the Domain Group Housing Price Report, as of March 2015, was $914,056.
Not sure if you know how first home buying works at the moment, but you normally need a deposit of about 20%. This is to pay for the Stamp Duty (which is a State Tax you must pay every time you buy a property), and also to assist in the approval process so that you don’t need to pay Lenders Mortgage Insurance.
So in this instance, the first home buyer would need about $182,811.00 saved to purchase a house that is the average price in Sydney.
So to go out and get one of these “good jobs that pay good money” I assume these young people you speak of would need to go to university first.
On average, it takes about 3 -4 years to get a degree, so if a young person goes to University straight out of school, they can expect to finish their course and be ready for the workforce at about 21, with a HECS-HELP debt of over $20,000. To make this a bit easier for you to understand, let’s say there is a young person named Joe Junior who has done just this.
If Joe Junior is extremely lucky, and is up there with the best of the graduates from that course and that year, he will get a job straight out of University paying usually under the average wage.
However, lets just be extremely generous here and say that Joe Junior got a job and was on the national weekly take home wage of $904 per week.
Joe Junior needs to only save every single dollar worked for about 4 years to save his $182,811 deposit for their first home.
Thank you, Mr Hockey, for throwing in that $7,000 first home owner grant too – that meant Joe Junior could get into his first home 8 weeks earlier!
Just a quick side note, this example does not take into consideration the rising house prices, or Joe Junior’s HECS-HELP debt that he obtained from getting his degree to get one of your so-called “good jobs”.
Joe Junior is now 25 (not so junior anymore), has been living at home with his parents this entire time and has not been able to spend a single dollar on any bills, board or holidays or public transportation. He also can’t afford a car or petrol for a car but then again “poor people don’t drive cars”. Oh wait, Joe Junior isn’t a poor person – he has a “good job that pays good money.”
Luckily Joe Junior’s parents have been happy to drive their little Joe Junior to and from work every day and provide free housing, clothing, medical expenses and also provide the food for his breakfast, lunch and dinner each day.
So finally Joe Junior has saved his $182,811 deposit (of which only about half will go towards his mortgage due to the stamp duty cost), and can now purchase his first home, with a mortgage of about $822,650.00.
According to the Commonwealth Bank’s online mortgage estimator, the repayments for a mortgage of this amount are $1,073.00 per week over 30 years.
So hopefully Joe Junior’s average weekly wage of $904.00 has gone up enough to cover the cost of the mortgage.
Joe Junior has been applying for these “good jobs hat pay good money” that you speak of (I assume by “good money” you mean more than the average wage as you have just seen it is not even enough to cover the cost of the average house prices’ mortgage in Sydney), but hasn’t had any luck as yet. He needed to stay in the same job post university to demonstrate to the bank job stability so that he could purchase his first home. So he only has a degree, and experience in the one job, one industry, and there are just not that many jobs out there paying “good money.”
Joe Junior now also can’t wash his clothes, eat food, or get to and from work as he no longer lives with his parents, so getting one of these “good jobs” is even more difficult.
So Joe Senior, are you really aware of all the facts and figures when you says things like buying your first home is “readily affordable” to young people?
Just slightly confused as to what you were thinking when you said these words at the media conference in Sydney.
Looking forward to another one of your politically correct, direct and well thought out responses.
Regards,
Another baffled Australian
Missed the speech? Watch Mr Hockey’s remarks here:
Want more like this? Try these:
Aussies hit back at Joe Hockey’s housing price gaffe.
Dear Joe Hockey, why don’t you come house-hunting with me this weekend?
Top Comments
Look I am a conservative and I agree with what Joe Hockey said, if you want to get a first home, get a good job that pays good money, and this Mel Wilson is no hero, as the word hero should be reserved for our firefighters, police, armed servicemen and women, etc. getting a high paying job is hard, anything worth achieving always is hard, but getting a high paying job does not require you to be a better actor than Jack Nicholson, and if you make getting a high paying job a goal of yours, heavens above you may actually achieve it in time.
To Australia's new hero Mel Wilson and Mr Joe Hockey
Ok that was a nice patronising letter to back up a patronising comment from Mr Joe Hockey. I don't agree with either comment so lets have a look at what is reality. Lets look at a first home buyer or someone that is around 25 like the person uses in the scenario, I'll use the same example and show you how he CAN buy a house if he really wanted to.
1. Joe is a first home buyer - he's not going to be buying in the middle of the market so forget the medium house price. Its his first home and buying on his own so settle for a unit. I don't know Sydney very well but I just found some reasonable looking units for around $350-$400k.
2. Lenders Mortgage Insurance (LMI) is there for people like Joe that cannot afford the 20% deposit. Therefore you really only need a 5% deposit plus stamp duty and costs so a little over 10% but definitely not 20%. Suck it up and pay the LMI (it gets added to your loan) if you 'really want' a house. Just about all the first home buyers I have helped have LMI and they are just happy to own their own house.
3. If you really wanted to own something and went for the unit I suggested then Joe would need an approximate deposit of $40,000 to buy the unit. Therefore it would take less than 1 year to save if he saved every $$. Not the unrealistic $180k deposit example given by Mel. I would think that Joe may be able to borrow some money from his family to help him save and maybe get a second part time job, that never killed anyone. There is even some options for people to buy a house without a deposit at all if their family have equity in their home.
Finally go and see your bank or a mortgage broker and find out what your options are, they are the experts, don't believe everything you read on fb. The point I make here is; if you really want something you will do it. I have a client who lived in a caravan for 10 years because she was really sick and couldn't work. She managed to save a deposit to buy a house valued at $650k and I know she would be laughing at all these people feeling sorry for them selves about having to rent a house and board at home. If she can do it, anyone can. It will be hard and it won't be your dream home but it will be yours. If you didn't already know this, the government is not responsible for you! Good Luck