Wise Accounts Blog

Young adults are delaying leaving their parents home because it is their only option to save enough for a deposit on a dwelling of their own.

If your rent or mortgage repayment exceeds 30% of your household income that housing is deemed unaffordable.

Unfortunately real-estate unlike the stock market does not crash down to reality very often. Even though house prices are roughly double what they ought to be there is no sign of a drop any time soon. The government is guilty of adding to the trouble: interest rates keep rising and the first home buyer's grant was quickly absorbed by the market.

Who profits from the situation?

Realtors The more expensive the property - the higher the commission.

State government The more expensive the property - the higher the stamp duty.

Local councils The more expensive the property - the more rates they can levy.

Land owners By releasing housing land on a drip-feed you can keep the prices up just like OPEC manipulates the price of crude oil by reducing production.

Residents of leafy suburbs Banning medium density housing maintains the prices high by keeping out tenants, migrants and other undesirable citizens.

Sollicitors Conveyancing is kept complicated so that only a profession of experts can benefit from a service which does not provide real value to anybody.

Banks The higher the property value during the course of the loan - the higher the collateral is case of foreclosure.

Everybody loves the price of their property going up until they have to sell and buy to relocate. Then they realise that after taxes and commissions are paid they would be better off staying where they are. The price of their house has gone up indeed but so have the prices of all the other houses they would like to buy...

One strategy would be to engage in a scare tactic to motivate beachfront residents to sell up in panic because of rising sea levels and coastal erosion.

Another alternative would be not to live on land at all. Have you considered living on a yacht? Changing the view from your window as you travel from place to place. Too bad you can't get a job to suit the lifestyle unless you traffic in drugs or other illegal goods...

What about living in a motorhome? Camping is great for a holiday but as a permanent lifestyle you might want to see how you survive your first winter before you make such a move.

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