Some Serious Consequences
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What is the main topic discussed in this episode?
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How did the pandemic drive people from cities to regional Australian markets?
And this whole exodus of people buying and shifting from larger cities to some of the outer areas, if you take a Geelong, for instance, they're starting to go toe-to-toe in pricing with, say, Melbourne, which, gosh, a few years ago, you would never have thought that that would have ever happened.
Yeah, it's been fascinating.
Which regional areas have overtaken major cities in house prices?
I mean, if you have a look at somewhere like the Illawarra now, Illawarra is getting very Sydney-like in its pricing. Geelong, as you said before, Gold Coast, Sunshine Coast are actually more expensive than Brisbane. The regional shift was one of the more fascinating parts or the fascinating things that happened during the pandemic. We did see more people move to regional Australia than had ever been reported. And it was interesting because over decades we've seen government policy try to move people to regional areas. But it did take the pandemic to do it. So lots of people moved to the regions. A lot of areas that had never seen much price growth did start to move.
How are transport projects like a fast train to Geelong affecting regional property demand?
So it was partly people moving there because they were working differently.
What social consequences arise when households can't become or remain homeowners?
But we also saw very good conditions in mining, in the mining sector that pushed up prices in a lot of mining towns. But what I think we do need to keep in mind that even prior to the pandemic, places like Geelong were really starting to take off. Getting to Geelong from Melbourne is, you know, it's about an hour's drive. There has been an investment into a business study into getting a fast train, which would reduce the commute to half an hour.
Well, let's just have a look at that because the impact of not owning a home when retiring is becoming that increasing problem. And years ago, as you say, when buying a home, when the ratio was two to three times the median incomes and now buying a property is set against 10 times the median income or in Sydney, 15 times. Back then, if you were 45 years of age and you maybe bought a business and secured that against the assets of your home and then the business failed and you could probably get back up on the bike. But now, if you're at that age, 45, 50, tragically, you might never, ever become a homeowner again. And that's a real social impact for people in this position and, of course, for the rest of, I guess, Australia.
I think that's right.
Why are people choosing to move from Sydney to cities like Adelaide and what jobs are coming?
And I think the outcome of that is people will probably take on fewer risks. So, if you're sitting there with a large mortgage, you know, as we now are, it naturally makes you more risk adverse than what you otherwise would be. Because if the business does fail and you lose your home, then you're right, you will struggle to rebuild that equity and be able to have a home that you've broadly paid off by the time you retire, even if you use a little bit of your superannuation to do it. And so I suspect a really understudied problem with worsening housing affordability in Australia and elsewhere is that fewer people will take those risks to start businesses to take on a new idea. And that I think leaves us all poorer.
The other way it really plays out, and we've seen this in looking for houses recently, is almost every house that we went to buy was a separation because we're looking for a family home. The time when people sell those, particularly in, say, Melbourne, is either normally when you downsize. And the only time you sell it beforehand is if something often goes wrong. And the problem there is if you do separate, the family home is the household's largest asset, you've got to split it. And what that means is that people fall out of homeownership and they often, particularly for women in most cases, don't get back in. And which is why we see growing rates of poverty amongst older single women, growing rates of homelessness.
And I think that's another part of the problem, piece of the problem we need to think more about too.
You know, it's such a big difference, isn't it? Like you're looking at the medium being $600,000 and well over a million, well over a million in the metro areas.
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Chapters
6 chapters
1
What is the main topic discussed in this episode?
0:01–0:07
2
How did the pandemic drive people from cities to regional Australian markets?
0:07–0:26
3
Which regional areas have overtaken major cities in house prices?
0:26–1:04
4
How are transport projects like a fast train to Geelong affecting regional property demand?
1:04–1:07
5
What social consequences arise when households can't become or remain homeowners?
1:07–2:21
6
Why are people choosing to move from Sydney to cities like Adelaide and what jobs are coming?
2:21–4:56
Speakers
3 identifiedMore from Aussie Real Estate Podcast
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