Ep12: Renters vs. Reality: Blame Game in the Housing Market

What more do you want?

00:01

Do you want the government to actually just give you a house?

00:04

Oh, it just gets me so frustrated.

00:06

Welcome to the Home Loan Insider.

00:11

I'm Max Lending, your industry insider.

00:14

And we're lifting the lid on the finance market, guiding you on how to cut through the jargon, manage your finances, and get investing into the property market.

00:38

This is Max Lending reporting for the ABC.

00:42

All right, stop.

00:44

I can't handle it.

00:45

This is not the ABC.

00:46

I'm going to be ripping the ABC a new one in today's podcast.

00:50

After listening to their left wing garbage they called a Balanced View, I've lost all faith in the ability for people in today's society to pull up their socks.

00:59

To get the work done so they, that's right, they can get into the housing market and not stand there waiting for the government to give them a handout.

01:08

Before we get stuck into today's episode, I just want to say we're back.

01:12

We're ready and raring to go for another season of the Home Loan Insider.

01:16

We took a little break after we did the 1st 10 or so episodes.

01:20

We've regrouped, recovered, listened to your feedback.

01:23

Thank you very much for it, but I'm going to do what I want anyway.

01:28

So how did all this start and what's gotten me all hot and bothered?

01:32

Well, I was recently perusing the ABC's News Daily podcast selection and I stumbled across an article titled The Renters That Will Never Buy.

01:42

And honestly, after listening to this left wing horse of an article, I just had to do a rebuttal.

01:51

Basically, the premise of this article is that house prices have gone out of control.

01:56

And that no one that actually rents will ever be able to buy a house.

02:00

They then bring on poor little Anne to tell her story.

02:03

Don't get me wrong, I totally understand that things are tough out there.

02:07

The cost of living has gone up and housing is expensive.

02:11

I'm living in the same world you are.

02:13

But let's have a listen and I think you'll understand when I say this is a propaganda piece that is driving an agenda.

02:22

I feel prices are so artificially inflated.

02:25

for buying a house, a unit or an apartment.

02:29

We've missed a boat for sure, but we didn't realise it was gonna be that extreme.

02:35

It just doesn't make any sense.

02:37

Right now, unless you're mega rich, or you won a lottery, or you have parents or family to help you, you know, for a deposit, why is it so hard?

02:55

Anne is just one of so many Australians who are renting and have given up all hope of buying their own home.

03:04

So what are political leaders planning to do to fix the housing crisis?

03:09

Firstly, this article is based on what some random person feels.

03:14

Stuffed data.

03:15

Data is so boring.

03:17

Let's go with concrete facts like.

03:20

You need to be mega rich or win the lottery to get a deposit that it's too hard to save for a house straight away.

03:27

That is all false.

03:29

It's like an overweight person who doesn't workout and only eats crap, saying it's impossible to lose weight.

03:36

The government needs to make me thin.

03:38

Please, I'm embarrassed for the ABC at this point.

03:42

Let's continue with this journalism gold where we deep dive into the plight of a renter who feels they've missed out on owning their own home.

03:50

My name is Ann.

03:51

I'm a social media coordinator.

03:54

I'm also an advanced certified dog sitter as well and a cake artist, which I do as a hobby.

04:00

My husband is an IT professional.

04:03

He has his own IT business running with four other partners and we live in Melbourne.

04:09

Four Seasons of the day.

04:11

Exactly.

04:11

And you're obviously really busy.

04:13

You've got a number of jobs.

04:15

And just tell me, you've been renting in Melbourne, haven't you, for about 10 years?

04:19

Yes, we've been renting, to be honest, for it's close to 17 years.

04:25

Remember a key fact here?

04:27

They've been renting for 17 years.

04:30

Recently had a $900 increase in rent.

04:33

$900 per month.

04:35

Yes, that's a lot.

04:36

It's very, very tough.

04:38

Despite us having jobs and working, it's not enough.

04:43

We've had to do a lot of sacrifices.

04:45

We don't have kids.

04:47

So you've chosen not to have kids because things are so tight.

04:51

Yes, it's a huge expense.

04:53

We can't afford it.

04:54

Just give me a sense, when you first moved into the place you're in, how much were you paying?

04:59

For rent then compared to what you're paying now, what are you paying now?

05:02

Now we're paying close to $3000 per month.

05:05

And when we moved in, I think then it was like advertised for I think around 200, 250 per week.

05:14

It's it's a very small house.

05:16

It's one of those really old houses, if you know what I mean.

05:20

So you you were paying about $1000 a month and now it's up around 3000.

05:24

Yeah, they recently put it up by $900.

05:28

This just came out out of the blue.

05:30

So, Anne, do you think you'll ever be able to buy a house in Melbourne?

05:35

No.

05:36

OK, let's get it straight.

05:38

The numbers are all wrong here.

05:40

The interviewer says that the rent's gone up from $1000 a month to 3000.

05:45

Anne says yes, it's increased by $900 a month.

05:50

Which means that she was paying $2,100 a month previously.

05:54

That $1,000 a month the interviewer is stuck on was the price 17 years ago.

06:00

The fact that inflation has gone out of control in the last two years, you cannot blame the last two years for 17 years of overspending and not saving.

06:12

Ann goes on to say they've had to do a lot of sacrifices because recently they've had a rent rise.

06:18

So what did you do with your income for the previous 17 years?

06:22

I don't care what era you grew up in, the principles of saving are the same.

06:27

Spend less than you make and save and invest the rest.

06:33

My favorite part here is that they've chosen not to have kids because last month their rent went up.

06:40

Love, you are not planning on having kids if that's the case.

06:43

This is pure blaming everyone else and not taking ownership.

06:47

But hey, in their words, the rent rise just came out of the blue.

06:52

They probably weren't watching the news because it's been on the news all year about the increase in rent.

06:56

Anyway, the ABC and the interviewer should have really taken this article seriously and provided some actual facts and figures.

07:04

What do they earn?

07:05

What suburb do they live in?

07:06

Has Anne and her husband done a budget?

07:08

Have they looked at renting in a more affordable suburb?

07:12

They both have blue collar jobs.

07:13

Anne's husband's in IT.

07:14

He should be on a good wicket.

07:16

If your job's not paying enough, then look for one that does.

07:19

But none of these questions have been answered.

07:21

Actually, none of these questions have been asked.

07:24

Anyway, let's continue.

07:26

What do you think should happen?

07:27

What do you want to happen?

07:29

Well, firstly, it'd be great to for wages to go up.

07:34

And I know this could be controversial, but for me personally, I think, you know, for first time buyers, more should be done for them.

07:42

And the fact is, why are you letting investors?

07:45

who have like two, three, four properties, why are you allowing them to purchase more properties?

07:51

You're allowing foreign investors to even purchase houses.

07:55

You know, I'm 46 and I look around and my friends have all settled down.

08:00

You know, they've got kids, they've got houses, they've got two cars.

08:04

I know everyone's circumstances are different, but it hurts.

08:08

It hurts.

08:11

The wage argument may actually be a valid one.

08:14

As we don't know what they earn, but that cuts the heart of the problem here in this article.

08:19

It lacks any sort of detail to make an informed decision.

08:23

It's a piece again based on someone's feeling.

08:27

Increasing the wages doesn't actually mean that they're going to save it.

08:31

Doesn't seem like they've saved any income in the last 17 years.

08:35

Why would a wage increase now suddenly mean they'll start saving?

08:39

If everyone's wages increase, guess what?

08:41

This is an inflationary effect.

08:43

Economics 101 More demand will cause prices to increase to level out potential supply issues.

08:50

Another I'll informed point was that the government should be doing more for first home buyers.

08:55

Well, hey, let's Fact Check that and we'll go through all the current schemes that are available for first home buyers.

09:01

Let's go through five of them.

09:02

The first one's in NSW.

09:04

It's called a shared equity scheme where you need a deposit as little as 2% and the government will contribute up to 30% for an existing property.

09:12

And up to 40% for a new property.

09:15

The second one's available in all states.

09:16

It's called the Family Home Guarantee Scheme.

09:19

Again, you only need a small 2% deposit and the government will guarantee the other 18%.

09:23

So this way you don't need to pay LMI.

09:26

The third one is called the Home Guarantee Scheme.

09:29

It's available in all states.

09:30

You only need a deposit of 5% this time and the government will guarantee the next 15%.

09:34

So that way you don't have to pay LMI.

09:37

The 4th one is called the Regional First Home Buyers Scheme.

09:40

Again, available in all states.

09:42

You only need a 5% deposit and the government will guarantee the next 15%, so you don't have to pay LMI.

09:49

And the fifth one in Victoria, it's called the Home Buyers Fund.

09:53

If you have a 5% deposit, the government will contribute up to 25% of the purchase price in this one.

09:59

But what they'll do, they'll exchange for equity.

10:02

So this one will actually reduce your mortgage.

10:04

What more do you want?

10:06

Do you want the government to actually just give you a house?

10:08

Oh, it just gets me so frustrated.

10:10

There are so many first home buyer schemes out there that I'm not going to bother even talking about all the schemes that were available to them in the last 17 years.

10:22

I love the last one, though.

10:23

The last one.

10:24

They're upset at the investors.

10:26

Why are we allowing the investors to buy more property?

10:31

Again, Fact Check that.

10:33

The vast majority of investors are just mum and dads trying to get ahead.

10:38

If there was no investors out there, where would the renters live?

10:42

You're assuming that every renter has the funds to buy a house.

10:48

Right now, the people listening to this podcast are either somebody who's looking to get into the property market or someone looking to expand their property portfolio.

10:58

Just need to understand that the current economic environment is the cards that we've been doubt.

11:03

All right, can't do anything about that.

11:05

So instead of complaining and wishing that someone else will fix all our problems, we really just need to take this on board and sort our own out.

11:13

At the Home Loan Insider, we're all about an actionable plan.

11:16

So let's move from complaining to doing.

11:20

First, take a good hard look at your expenses.

11:23

Start small and cut all the unnecessary stuff like Uber Eats, DoorDash, blah blah blah.

11:27

You know the rest.

11:29

If income is really an issue, well guess what?

11:31

Change your bloody job.

11:33

You can download our free budgeting calculator from the website and start seeing where your income's going every month.

11:38

The next stage is to think outside the square.

11:41

Do you really need to buy a house within the 5K radius of the CBD?

11:45

Because guess what?

11:47

Those houses are the most expensive houses, and you've probably missed the boat for those ones.

11:51

Here's an example.

11:52

Look and think where the growth corridors are in your state.

11:56

Pro tip here, so take note of this.

11:58

The growth corridor is pretty much any suburb that has easy access to transportation to get into the city.

12:05

They're a little bit more further out, but here you'll find a house that is more reasonable for your money and they've got good growth potential.

12:12

Another one is you can rent vest.

12:14

We've gone through this before.

12:15

In a nutshell, it's where you buy an investment property in one of these growth suburbs.

12:20

And you rent where you actually want to live.

12:22

This way you've got your foot in the door and you've got rent coming in to help you pay for the mortgage.

12:27

Now for our friend Anne, if you're listening, feel free to send me an e-mail.

12:32

I'm sure I can help you cut some of those expenses and get you into the property market sooner rather than later.

12:38

And for the ABC, I'm disappointed in you.

12:41

That was a woeful piece of journalism.

12:46

Thank you very much for listening, guys.

12:48

That's a bit of a rant of rave this episode, but hopefully you enjoyed it and learned something.

12:53

But as always, you stay classy and I'll see you at the next one.

13:02

If you have a question that you would like answered on the show about budgeting, mortgages or finance, then drop us a line either via our socials, e-mail or website.

13:13

Details available in the show notes.

13:16

Any opinions and views expressed in this program are just that opinions.

13:21

All information is general in nature and should not be seen as financial, economic, legal, investment, accounting, or tax advice.

13:31

This program makes no representation or warranty as to the accuracy or completeness of any information contained in this program.

13:39

You should consult a professional advisor in relation to your own personal circumstances.