By Ben Knight and Ruth Fogarty
Australia’s obsession with real estate is practically a national sport, with spectators watching auctions as keenly as any footy game.
But in Melbourne and Sydney, some first homebuyers are faced with difficult choices: vast mortgages, vulnerable to interest rates rising; the prospect of moving to the city’s fringes, or even moving back home.
Tougher still is the realisation that they are competing with experienced investors equipped with tax breaks and negative gearing.
Now as the housing market begins to slow down, predictions of a crash are beginning to emerge. For the younger generation, that’s exactly what they’re banking on.
Here are a few different perspectives on the current housing debate:
Jules McKendry: The first homebuyer
Jules McKendry and her partner have spent every weekend for a year trying to buy their first home.
At just 25, Ms McKendry has managed to save $150,000 towards a deposit, but she is feeling ripped off.
She has bid and lost on many properties around Melbourne, but her competition is not other homebuyers — it’s investors.
For Ms McKendry, a collapse in the property market cannot come soon enough.
“If the prices keep doing what they are doing it now, there’s no way my kids will ever own a house,” she said.
“To them it will be normal, because no-one will own houses.”
Millie, Ben and Daisy Robson: The young family
Millie, her husband Ben and their young daughter Daisy have moved back home with Millie’s parents — and all three of them share the room she slept in as a teenager.
Ms Robson’s parents, Gerry and Libby, also have their three sons living at home — but this family is lucky enough to get along.
The couple say they are unable save up for a deposit to buy their own home and pay rent at the same time, so they have decided to sit tight, keep saving and wait for the tide to change.
“We’ll just try and put away as much money as we can and see where we’re at when this bubble bursts,” Ms Robson said.
Ken Morrison: Chief executive of the Property Council of Australia
Ken Morrison of The Property Council agrees there is a housing affordability problem, but believes undersupply and an increasing population is the root cause.
“The big factor pushing up prices has been the chronic undersupply of housing … and the failure of that supply pipeline to match our growing cities and our growing population,” he said.
The council believes a thriving housing industry makes for a thriving economy, and is a big supporter of negative gearing.
It recently launched its own campaign against Labor’s suggested policy changes, which proposed that negative gearing should only be available on newly-constructed homes.
Catherine Cashmore: President of Prosper Australia
Buyer’s advocate Catherine Cashmore has amassed some unusual data which she believes is proof there is a massive oversupply of vacant properties in and around metropolitan Melbourne.