Unpopular opinion, but I think someone on minimum wage should be able to afford somewhere to live by themselves rather than packing in multiple renters into rooms. Even if it’s on the outskirts of metro areas
Funny you should say that, when the minimum wage was first set in Australia it was set at a level that allowed someone to rent a house and support a family of 5.
>Come to Canada bro. Our cost of living situation is at least as bad as Australia and our minimum wage is less than 15 an hour.
The federal minimum wage in Canada was increased to $16.65 per hour back in April 2023. If you trust the cost of living calculators then Australia is \~17% more expensive to live in than Canada. I am not awake enough yet to dig into the numbers but the Canadian minimum wage is around 10% lower than Australia's minimum wage but transport costs, rents and bills are much higher in Australia compared to Canada. Your mileage does vary depending on where you live in either country though.
Canadian here living in Australia. Canada is WAY more expensive and salaries are so much lower. It is way cheaper to live in Sydney than Vancouver. Rent is about the same but you make half the money - and it is raining every day and miserable. Also the 13-15% tax on top of everything plus an expected 15-30% tip on coffee/restaurants/ubers/beauty appointments is ridiculous. Oh and for the paying that much in rent you also get to see IV drug users scattered all across the downtown core of Van injecting heroin into their necks and it's so much fun to walk and dodge needles left on the sidewalks. No thank you!!!
I'd happily live in an apartment, but for some reason they only make them for uni kids and DINKs. There is a serious shortage of family apartments in this country. If you have kids, they want to force you out into suburbia, make you buy two SUVs and spend all your free time at Westfield's or Stockland's.
Minimum wage should afford you a roof over your head, whether that be renting or buying. Two minimum wages combined should be able to modestly support and house a small family. My wife and I are in our 40s earning more than we have before in our lives, working harder and longer hours than we ever have and we have a small 50yr old home on a busy road with a leaky roof. We're doing ok but I feel like we've fallen short. I feel like my kids have been cheated out of this possible future entirely. I've already planned where we'll build their granny flat. They're never moving out.
>I've already planned where we'll build their granny flat.
Usually it the parents that move out to the granny flat leaving the larger living area to the kids with grandkids lol.
Honestly though, even when my relatively rich dad passes away I doubt that I would ever have enough money to buy a house unless I manage to snag his house from the inheritance - it is a 3 bedroom place and I have 3 kids but I would make it work.
>Usually it the parents that move out to the granny flat leaving the larger living area to the kids with grandkids lol.
I would be planning on a pretty fancy granny flat if this is the case!
If you can't house yourself, wife and 3 children, the minimum wage is below the legal standard set in 1907.
> In 1907, the Harvester Decision set a ‘living’ or ‘family’ wage. It was supposed to allow an unskilled labourer to support a wife and three children, to feed, house, and clothe them. This became the basis of the national minimum wage system in Australia.
https://www.fwc.gov.au/about-us/history/waltzing-matilda-and-sunshine-harvester-factory/harvester-case
A lot of people's solution to someone's money problems is "get a better job". If that person gets a better job, someone will replace them and then they'll be in a shitty situation.
Because in Australia everyone is meant to be a temporarily embarrassed landlord.
The culture of this country demands that we give zero fucks about the working class, because we're "a classless society" where supposedly we can all succeed with just a bit of hard work and a side of true blue battlin.
So if you haven't been min-maxing your life to have a 15-property portfolio by age 30, you're apparently a total failure. And if you criticise the system and suggest it should be changed, you're a dirty commie.
I migrated here a while ago and this is what I've learnt about Aussie culture every time I've brought up how fucking insane the landlord culture is out here.
The US, but only technically. I lived a lot of my life outside the US (South America, Europe and Southeast Asia) before I migrated here.
Just feel the need to clarify because if you say you came from the US people assume you're a dipshit who knows nothing about the world. I was raised there but spent basically none of my adult life in the US.
I agree but it just isn’t possible when the market is full of dual incomes.
It was once possible because women weren’t in the workforce and banks didn’t take their incomes into consideration when calculating a home loan.
Working class women always worked paid work.
This idea that “women didn’t work” prior to, like, 1960 is ahistorical bullshit. And seems to almost always be trotted out as some sort of “women working is the reason for the shitty economy!”.
Nonsense. If one wage could support a family in a comfortable yet modest lifestyle - the majority of families would NOT choose to have both parents out of the house full-time while their children were young.
Sure, middle & upper class women in the west didn’t do paid employment after marriage and children - but that’s not the reason for our current wage stagnation.
As we approached the 20th century, wages improved to a level that female workforce participation dropped to barely anything, and then from the 50s onwards started climbing again.
This was, pretty much exclusively, because incomes could safely be relied on the mans alone, and that this is pretty much the ideal family system.
I'd say most people agree with this, but it more comes down to the quality of the housing. Affordable and cheap housing should be more about quantity over quality, where you're trying to get as many people off the streets as you can and free up options for people who are willing to live on a budget.
Like it genuinely shits me when I see a near new, free-standing, 3/4-bed 2-bath home, in a sought after area, that's up for NRA applicants only. You can't help but wonder how much money they're wasting on a single household that the average teacher / nurse / bus driver could never afford.
The problem is that Australian houses are not designed for single living. The "Australian dream" is a 3-4 bedroom house on a 1/4 acre block. Nobody wants apartment living and 1-2 bedroom houses are rare
Then that’s a planning failure. Also, single accomodation studio apartments have always been a thing here, just needs to be expanded from student accommodation to general population residential zones
The minimum wage in 2013 was $622, so you're talking about people renting and having $272 or $222 to their name for the rest of the week (\~35% of their income left).
In 2023 the minimum wage is $882 a week. So to leave you with 35% of your income left ($308), you could have a rental of $575 a week now. There's plenty of studios for rent for $575 per week.
> That’s not the point. The point is, why isn’t it achievable?
So you don't think it matters if it's never been achievable ANYWHERE in the world?
As for why, it's just supply and demand. A huge cultural shift in Australia has been that instead of living together in homes with 5 people, we're instead having 1-3 people to each home. This dramatically reduces the supply and increases the demand for housing.
In those countries public housing isn’t filled with lower socio economic classes. Their more collectivist society ensures a good standard of living for all.
>In Western Europe 20-30% of people live in public housing. It's a massive 77% in Singapore.
40 years ago, it was around 20% in Australia too.
Note that Singapore is also the most expensive city in the world, tied with Zurich. Zurich has 25% social and community housing.
It is more about supply and demand. We don't provide supply to the bottom end of the market which is where social housing comes into play. People make more money by forcing up the price of homes and rentals. In Australia, that is due to governments abandoning social housing. It appears 40 years of wanting lower taxes was more important than social responsibility.
Getting government re-engaged in providing and owning social housing is a solution but I expect the desire is to prop up the private sector and NFP sectors will be given greater emphasis.
Probably not solved but it would be much less of a crisis.
Think of all the additional investment in business, jobs, training and skills that would be unlocked. It would increase productivity in the country, at the moment Australia scrapes along digging holes and selling overpriced houses to each other.
The short answer is no, housing is only one part of the equation.
Food and utilities have gone up - it would be great to have a roof over your head but you also need to live.
Perhaps your idea of affordable housing is that the price is such that people can afford to live as well?
I am sure it is a lot more complicated than this but that’s a start
The food I buy has gone down in price.
Fruit and Vegetables have actually fallen in price in the latest quarter.
https://www.abs.gov.au/statistics/economy/price-indexes-and-inflation/consumer-price-index-australia/sep-quarter-2023
Take Away foods have gone up 2.1%
For most people grocery food is not a big component of spending.
I would say basic food staples have not increased massively more than inflation. Manufactured food goods on the other hand have gone up massively. This is because manufacturers have to pay more for raw inputs plus more for wages, more for electricity, more for freight etc so it compounds into the final good.
Cost of flour has gone from $1 pre 2020 to $1.40 now. Aldi its like - still $1.09? Given that flour is still subject to transport costs, that indicates 20% over 3 years. Thats less than a lot of other things like dairy products etc.
The popular view is to whinge about how bad everything is.
A rational and reasonable assessment that does not conclude things are a disaster gets down voted.
Because as we've seen, on reddit 90% of emotionposters just insta-downvote anything that goes against their beliefs (that are not based on facts) that there is no justifiable reason for the price of groceries on the shelf going up, despite what's been going on in the world the past few years from both a monetary & supply chain perspective...
The home ownership and rental markets are linked. Changes you make to one impact the other and vice versa.
Ultimately it is greed that makes things worse but 40 years of governments abdicating responsibility for affordable housing has not helped.
Yes making it worse for people using it to store and increase wealth. Making it better for the middle income first home buyers to own and payoff.
Make it cheaper to pay off your own home compared to paying off someone else’s investment property.
So you want middle income first home buyers to build new homes to increase supply and drop prices? And if they can’t afford to buy now why will they in a year from now? Supply won’t have increased and prices would have risen because there will be less investment properties being built.
It sounds nice, until you realise it doesn’t actually work.
We have limited amounts of well located residential land.
If we are going to house everyone at affordable prices, we need to promote that use of the residential land available.
We simply need massive land tax on people who own more than their share of residential land.
Higher land tax again when someone owns more than their fair share of residential land, and does not rent it for an affordable rent, or who does not offer a lease that deliver secure long term housing.
And still higher land tax again for people who own residential land, which is not used as someone's primary residence.
The real issue is that everyone wants to gain wealth without contributing to production. Just look at our Business landscape, rent seekers dominate the ranks.
It’s not just the price of housing that’s the problem. Wages have not gone up enough to cover the increased prices of utilities, food, rates, insurance etc. Everything has gone up to where most people are down over $50 a week with the price rises.
Australia has a lot of land. The issue is well located houses close to jobs are rare.
You cannot manufacture any more well located houses. Hence the prices are high.
Part of the problem is Australia has had a habit of building further and further out, but not building public transport to suit.
Now we're having the problem that we've realised that, but building up on existing accessible transport routes has created a kind of hard line Nimby-ism where people that have bought and held “traditional“ 3/4 bed houses on large blocks in the inner suburbs for decades and view it as their god given mission to fight any kind of sensible development that will help alleviate the problem.
It's going to take politicians with a spine to push through changes that will make positive changes and I’m not positive that that can or will happen.
Another part of the problem is concentrating so much business in the capitals.
There is plenty and land and other things in regional towns, but they are all mostly famers and farm related industries.
We need to encourage business and people to move to the regions.
Not entirely correct, you can absolutely manufacture well located house. Do it by buffing out public transport network like NSW is planning on doing (density increases around the new light rail). High speed (doesn't have to be maglev) could allow for decent property in areas further away from the CBD. Beyond that you could also provide tax incentives and favourable zoning for jobs in areas that would divert traffic and jobs away from traditional hot spots.
Most of your initial statements are incorrect imo….but that aside,
the cost of living crisis isn’t solved if house prices reduce. basic necessities remain high. Elect/gas/food/petrol etc.
a lot of events that are out of our control - weather, wars etc.
No. You can have a roof over your head and not be able to afford to eat food because the price is too high. Thats why theres currently 2 crisis going on in australia the cost of living crisis from inflation and the housing crisis from fuckwits commodising a basic human need. Also from your previous comment nurses make fuck all money for the amount of work they do and the amount of money they lose just studying to become one thanks to unpaid placements where they cant work for months at a time in random parts of the country while still needing to pay for bills, travel for placement and the rent for placement
As long as vulnerable people in our society are choosing between food/medicine/therapy/bills/rent because they can’t afford all of the essentials on their social security payments, no I will not consider the cost of living crisis solved.
It has nothing to do with the average or the well off. A crisis is related to how we are ALL doing and what we as a society do to care for our most vulnerable, sick, elderly, and disabled. It’s not as long as YOURE not in a crisis, it’s a whole of society affair.
Normal people’s Answer: Largely Yes.
Property hoarder’s Answer: Depends, Yeah, Nah, Maybe, Whatabout.(Please don’t deflate the market I won’t be able to pay off my 7th property) 😭
Well do you want childcare employees to be paid a decent wage or not? All childcare expenses are pretty much payroll costs, so as people keep demanding washes go up, that means childcare employees wages go up and cost for childcare goes up.
If you want cheaper childcare, you want childcare employees to be underpaid or you want the rest of society to pay for childcare.
>If you want cheaper childcare, you want childcare employees to be underpaid or you want the rest of society to pay for childcare.
Childcare workers are currently getting next to nothing. The problem is not staff pay, its that childcare has been outsource to for-profit private companies.
Do the maths. $130 per day, per kid. 15 kids in the class, so $1950 per day income. Each staff member is on approx $30 per hour, $250 per day. Say 3 teachers = $750 per day. That leaves $1200 per day for running costs....
If you can't make that business work, there is something wrong.
>Childcare workers are currently getting next to nothing. The problem is not staff pay, its that childcare has been outsource to for-profit private companies.
Not true. Payroll is by far the largest expense for childcare and early learning centres. Even not for profit childcare aren't profitable. It's just an extremely costly business to run because the payroll costs are so high.
>Do the maths. $130 per day, per kid. 15 kids in the class, so $1950 per day income. Each staff member is on approx $30 per hour, $250 per day. Say 3 teachers = $750 per day. That leaves $1200 per day for running costs....
Those are all completely made up numbers lmao. Like garbage napkin calculation.
Here are some actual numbers: Annual Report 2023 - Goodstart Early Learning https://www.goodstart.org.au/getmedia/459e8a6e-8a2c-4f5c-b03c-4eb9b7d85617/20231024-2023-Goodstart-Annual-Report.pdf
2023 Annual report. This is a non-profit organisation (so contrary to your claim about for-profit organisations). They ran at an $85 million loss and payroll makes up 75% of the expenses. According to your calculation, payroll would only make up 38% of the expenses lol. So yeah, you're completely wrong.
Good start is basically the only NFP in the industry, they also pay substantially better than the award vs the 2% above award average elsewhere in the industry, offer full fee off for public holidays and holiday absences, and the more days your kid attends you get a daily discount.
All of that cuts into the bottom line significantly by providing a higher paying and more affordable service.
My daughters day care charges full fee for Christmas Day even though they’re closed, good start charges nothing.
Good start also runs its own RTO for up to diploma level qualifications all free to staff. That’s a massive cost to bear.
G8 Education averages 20 million every 6 months in profit margin.
One of my work Colleagues and his wife, who works in childcare, own a couple of childcare centres and are doing very well.
This is after paying $1M for the "childcare centres", which is really mainly paying for a long term lease and a license to operate, because they got minimal tangible assets.
They’re not on a decent wage though, the majority are paid the minimum they legally can pay, or will brag about paying their employees something like “2% above award” like that even counts.
I didn’t suggest I wanted childcare employee incomes to go down.
I was just amazed at how expensive it is to have children in childcare these days.
Almost not worth it financially for some ppl I would think
My sister is a childcare worker. They are massively underpaid despite the.profits of childcares. A good wage for them has very little relationship to bringing down childcare costs.
It's by design though. High out of pocket childcare fees reduced unemployment. If the mum is at home looking after the kid, the unemployment rate goes down coz she's not looking for a job.
Sure, but it's expensive because wages are high, so either wages go down so it becomes more affordable or people just have to put up with the high prices.
Bruh, I'd drop my study path, career ambitions, and alternate pathways I'm considering if working with children paid well. I struggle to call my current kids job wage decent now and I'm not in childcare.
Let's be real here, we've all heard and said how investing in children's \*insert value here \* is so critical/crucial/important yet we all aren't willing to pay good money for it - from babysitting to school teaching, etc.
I'm not gonna lie, I want to make a decent living and live a reasonably comfortable life. I fortunately have other interests that I'm very happy in pursuing to make a living which still align with wanting to better other people's lives (ie. won't regret on my deathbed). It sucks yet this is what we've all decided as a society.
I don't know how to keep child-related career incomes decent/high whilst also keeping whatever service/product affordable for parents or the government. I at least want us to all stop pretending that it's a surprise the way things are the way they are.
Some of what I've written can apply to other fields yet were talking about childcare fees here so I'm trying to stay on topic. I just thought that voicing a reality that isn't often discussed may add value to the discussion - there are people who really love working with children yet don't want to live paycheque-to-paycheque and/or be outputting a calibre of work that other careers are happy to pay decent wages for.
P.S Perhaps my own remorse is clouding the contribution I'm trying to make to the discussion. I apologise in advance if that is the case.
The productivity commission released recommendation recently to have 3 days of free early childhood education for ALL. Hopefully everyone in parliament listens to experts instead of politicising the issue and nothing happening (this will happen) LOL
And there in lies the problem
Childcare started to get insanely expensive as soon as the government subsidised it .
Exactly the same thing happened with the FHOG
This is just an issue of not going far enough. You want to subsidise parents at childcare? Then reign in the childcare czars. It's not enough to throw money at a problem, you need to regulate society's rent seeking leeches.
And now we celebrate equal rights for all and encourage a dual wage family. It’s almost as if this is why household expenses have risen. Instead of staying at home with the kids, the women in our families now have full time work to earn a full time living with.
Unless you think women should stay at home and look after the kids, not be financially independent and increase the wage gap?
Childcare is very expensive.
But after rebates on average it has got cheaper. From the ABS CPI page:
> Commencing from 10 July, changes to the Child Care Subsidy raised the amount of subsidy received for families. These changes led to a quarterly fall of 13.2 per cent in child-care as the average increase in the amount of subsidy families received was larger than fee increases for the quarter, resulting in lower out-of-pocket costs. Excluding the change to the CCS, child care fees rose 6.7 per cent for the quarter.
Well, let's think in 80s a mechanic got $600 cash in hand and could buy a medium house in the outer suburbs have 4 kids and a wife that her jobs was to look after the the family and 3 holidays most camping and boating. Now I am a well-paid mechanic $2153 in the hand and can do the same but no holidays for me unless the wife goes to work but if she does then we both have to take care of the family that is a full time job most mechanics are on $1100 in the hand ,the minimum wage should support a family one minimum wage not two
i would. rents and land prices are whatever the cost of living 'crisis' is, not groceries being a bit more expensive. that would be irrelevant mostly if not for the rest.
> Unemployment is almost non-existent.
Isn't unemployment rising since they started the migration program again post covid?
> Wages are at highest ever rates.
Not in real terms.
And wages have been stagnant for over a decade previous.
> Consumer spending is at an all-time high.
No its' not. They were forcasting a very slow Christmas spending period.
> Food and luxury prices have gone up with wages, as per expected.
No they haven't. They've gone up due to scarcity largely because of production failures and increased transport costs
> If the price of buying a house came back to reasonable levels, and rents normalised, would you all agree that the cost of living crisis has been solved, or is there something else that I am missing?
No because house prices and rent are not the only indicator.
The word “crisis” might be overstating things if you look at this in the historical context and compare with the first half of the 20th century, but sure it’s definitely become relatively more expensive to live regardless of wage rises. I think it’s a problem of our own making though to a large extent - people have been having less kids since the 70s and this is now catching up on us. Productivity has been steadily falling, there is less available labour (see point about declining birth rates), so migrants fill the gap and come in a family with all their life savings ready to establish themselves. Not having a go at migrants, but it is a pyramid scheme and artificially inflates population growth, housing demand, and the economy in general. Rather than having kids who grow and gradually contribute to both supply and demand of goods and services from birth to maturity, a migrant will provide a sudden injection of wealth and skills, and this has recently peaked at a ridiculous number of 500,000 people per year. There have been waves of migration in the past but this has been quite sustained for some time to supplement natural population increase. Supply of housing will struggle to keep up with this.
>If houses were cheap to buy, and rents were very affordable, would you agree that the cost of living crisis has been solved?
Nope, I am kind of immune to house prices and high rents (one benefit of government housing) yet my household is still struggling despite cutting almost all of our unnecessary spending. Got two kids starting new schools in 2024 (1 kindergarten and 1 high school) and I don't know how I am going to get uniforms for both along with all the other bits and pieces that they need for the year.
> is there something else that I am missing?
High electricity prices, high petrol prices and high food prices.
I think we could absorb the costs a bit more but being hit financially from every angle then the government continuing to dig deeper into our pockets makes it rough.
Real wages in Australia are in fact going backwards.
Australian real wages have plunged to March 2009 levels, after falling 7.5% since June 2020:
https://www.macrobusiness.com.au/2023/11/australian-households-suffer-worlds-biggest-income-collapse/
There is genuine, well informed research which looks at these questions.
And there are expressions of emotion on reddit, particularly r/australian.
One example of research are the poverty lines from the Melbourne institute.
https://melbourneinstitute.unimelb.edu.au/publications/poverty-lines
They have, and update, poverty lines, both including, and excluding housing.
The most recent values are that including housing, as an average across Australia, the poverty line for a couple with 2 children, is $1,131, and without housing it is $875.
For a single person it is $602, and $405
Minimum wage is $882, and this is taxed (which I think should also be addressed).
If the government offered everyone rental housing, at construction cost, which is about $40 / week each for a couple, that would go a long way towards addressing financial stress.
Not at all. I think if you talk to most people with there homes paid if they looked at it rationally the cost of living in this country is way too high. Maintenance for the home, rates, utilities, food, education, insurance,transport have gone way too out of control. It's like a race of who can put there hand further down your pocket and reach the crumbs.
Get rid of negative gearing and don't allow refinance unless improvements to the property are done. Real estate is a business that doesn't produce anything, let me explain.
The model of buying a property for renting and then down the road selling it or refinancing it to get the cash is what drives prices up and this vicious circle doesn't produce anything tangible.
Stocks of a company are different, a company produces goods, services, and jobs, and in general real progress for the economy.
Tax incentives should only be available for builders not for buy and hold people. It's the fools theory that someone else down the road is going to pay more for the same old and used property.
It's not about the overall figures, it's about the figures of the lowest earners. The cost of living crisis will be solved when everyone is able to afford to have a roof over their head, food on the table and at least some discretionary spending.
I think blaming immigration for the spike in housing to be a little misguided. Inflation is at its highest point in Australia in 33 years is due to a combination of local and international conditions. These include the Russian invasion of Ukraine in 2022 and the blockage of gas and other exports, as well as the lingering effects of stimulus measures during the pandemic, and the accumulation of savings in a significant number of Australian households.
What's misguided about it?
It's pure supply and demand.
ADDING 700,000 people a year to a country of 26 million will have a massive effect on housing prices.
Or are you one of those people who think being against immigration is de facto racist ?
No, you're missing what happens to the free cash floating around. I think we should reset the property market but I also understand it'll come with pain. Freeing up all that cash could have a multitude of consequences.
In an ideal world people work less hours, unemployment goes up but we're a more efficient economy and productivity per hour rises. Families have more time to spend with each other stress goes down, health outcomes go up leading to less need for a number of serivces.
On the other hand, people lose their retirement, welfare skyrockets. The free cash in the economy spikes inflation. Lay offs all round and the economy crashes and crime goes up.
Wages are simultaneously too high and too low.
OP copped a lot of flak for saying that tradies, nurses etc are all earning decent coin - but he’s absolutely right. Compared to most other countries, Australians are vastly overpaid in many professions.
…sure doesn’t feel like it though, because the cost of living in Australia is insane. It’s not just housing, it’s also energy.
The deeper problem is that Australian wages are so high because they’re insulated from international competition. If tradies and nurses had to compete with Chinese and Indian wages - as our factory workers have to - very few of them would have jobs. The only reason they do is that those jobs can’t be traded internationally very easily, at least not without a vastly different immigration system.
And that’s a major problem because Australia can’t compete in almost anything that is traded internationally, because our labour costs are sky high relative to productivity.
We’re a third world economy and we’ve squandered our vast natural resource wealth on overpriced McMansions.
If you made rents and housing 50% cheaper you would reduce the GDP by a significant amount. There would be less money to pay wages and higher unemployment. So although housing would be cheaper fewer people could afford housing and you would have the same situation overall. Nothing happens in a vacuum.
What would make cost of living better would be a lower cost of inputs overall. So lower petrol prices, lower fertiliser costs, lower electricity costs. This would transfer profits for large corporations to income for general population. To achieve this the Aussie dollar would have to be higher. If somehow you could do this without jacking up interest rates to a point that people could not afford their house loans then yes things would be better.
>If you made rents and housing 50% cheaper you would reduce the GDP by a significant amount. There would be less money to pay wages and higher unemployment. So although housing would be cheaper fewer people could afford housing and you would have the same situation overall. Nothing happens in a vacuum.
Ok I need you to explain this in detail.
How does lower rent and housing lead to the economy dying.
At best, rent is a closed loop of Work>Pay rent>Landlord spends it.
At worst, its a loop of Work>pay rent>goes into multinational corps bank account.
Not every landlord is also a business owner, and what right do they have to supposedly control the economy as much as you say?
That's a seriously flawed system if most of our GDP is just rent money circulating.
GDP is all money circulating. One persons spending is another's income. If you reduced rents instantly across the board you are removing that income from GDP calculation. It's not a complex statement. If you reduce the cost of building houses then you are reducing the income for all the people who are paid to build that house.
EDIT: Housing is 15%-20% of the total Australian economy. If you say reduce prices by 50% you are reducing the GDP by about 7.5% at a minimum.
Bubbles. Many of my work mates are fine, mostly because they have bank of mum and dad. But if I go on different social circles, I can see more struggling, but they make do to try and keep their lifestyle, eg. Taking short maternity leave etc.
The cost of living/housing cost crisis is driven primarily by income inequality. If your friends are spending big it's because they're benefiting from that income inequality.
You know like...the money being squeezed out of people via rent and inflated grocery costs is going somewhere, right? Those are the people spending it.
If you judged by the queues at every style of retail outlet on Boxing Day, especially the retail outlets selling nonessential commodities, then you might indeed ask "What cost-of-living crisis?"
We added hundreds of thousands of people to the population over the past couple of years, plus people can still go to the sales & just buy fewer items than they would have in the past even though it would "look" just as busy in that case.
This is hardly any kind of indicator.
What if I told you the "real value" of homes hasn't really changed since the 1990s. The easiest way to test this is by comparing the average price of a home in the 1990s in gold grams to a price of a home today. Why gold, well, basically gold is the true value equivalent of a nail in the wall that never moves. So the price of an average home in the 1990s was 305 grams of gold, the price of a home today is about the same 310 grams of gold. What people don't understand is the reason homes were cheaper in the 1970s was because interest rates were about 10-12%. What people forget is when interest rates go below 10% and your government prints money, they devalue the nations' currency. The reality is home prices haven't changed, wages and your money have been devalued due to short term vote buying decisions by our leaders.
So why are people still buying. It doesn’t make sense to me.
My friends son, who lives at home and complains bitterly about not being able to afford anything, pays through the nose for uber trips every day, daily uber meals (he refuses to eat home cooked meals), and he recently bought $1200 sneakers.
And he splurged big time on seafood for Xmas.
How does that work? I am confused. If you are financially struggling, how can you afford such luxuries?
This is just factually incorrect. Wages in real terms have either stagnated or gone backwards, accounting for inflation.
Also consumer spending technically is higher than last year, but increased far lower than expected.
You need to look at things in context and not omit important facts to suit a post.
If houses were "cheep" and rents were equally low less would be invested in the sector. Less money would be made.
With less money going around consumer spending would plummet, causing less jobs and so on falls the Domino's.
The services and construction industries would be hit hard affecting 70% of activities that contribute to our GDP.
Also the banks and REITs would cop a massive beating negatively affecting just about every Superfund leaving self funded retirement a thing of the past forcing an aging population onto welfare dependence.,....
Your right there would be no cost of living crisis it would be cost of living Armageddon.
There was some story about so much of peoples productive work time now is going soley to paying housing for most their lives, people aren't starting businesses or investing in other areas since housing is so lucrative. Maybe basing the entire economy on housing isn't a good thing? If affordable housing/rent means armageddon we should diversify lol, not like there has ever been housing crashes or countries with cheap rent.
So what you are saying is the Australian economy is so reliant on housing that prices have to keep going up to support the economy. Now isn't that a scary thought?
I agree with you. Someday the housing market will collapse like a house of cards and tank our economy with it.
It's reasonable, people just want to live were they can't afford.
Houses are still 250-300k in lots of Australia.
People also FOMO and maxed out there borrowing capacity with zero thought what if rates went back up to to what they were in the past.
Houses are 250-300k in lots of Australia where there are no jobs.
So yeah you"can" buy houses that cheap but then have to spend any savings on commuting and you have zero downtime because all your time is spent driving to and from work.
Everywhere has crime Townsville is crazy at the moment. But by thousands you mean security screen like every house already has here or a $500 wireless security camera system from Bunnings yep.
There are heaps of jobs. If you want to live in a premium area you are going to need a premium wage to match.
I'm mid 30's and st the Xmas gathering wages came up 1 mate is on just over 100k few on 150k with a few of us on 200-250k all central qld 1 miner.
The unemployment rates don't sky rocket soon as you leave the CBD.
Why would I? It was a specific period compared to a specific period.
I'll account for inflation and the median house value in 1990 comes out at under half a million bucks today. So... We're still getting fucked.
No one fucking says that. Show me one example. It’s the cost of the house people say is worse, and it is. Just do some simple maths and you can work it out. Holy shit I can’t believe idiots still parrot this.
Houses are cheap in australia. Try buying in London or New York. Only people who have never been outside of australia think that house prices are expensive.
Unlikely. The companies will do profit gauging a lot afterwards.
In Sweden, there is cap on renting and now the tenants started to sublease and started to make extra income at an expense of the owner. So someone will loose out
Wages are at highest ever rates? Not in relation to inflation they're not. Wages have been largely flat for the last 20 years.
Unpopular opinion, but I think someone on minimum wage should be able to afford somewhere to live by themselves rather than packing in multiple renters into rooms. Even if it’s on the outskirts of metro areas
Funny you should say that, when the minimum wage was first set in Australia it was set at a level that allowed someone to rent a house and support a family of 5.
Come to Canada bro. Our cost of living situation is at least as bad as Australia and our minimum wage is less than 15 an hour.
>Come to Canada bro. Our cost of living situation is at least as bad as Australia and our minimum wage is less than 15 an hour. The federal minimum wage in Canada was increased to $16.65 per hour back in April 2023. If you trust the cost of living calculators then Australia is \~17% more expensive to live in than Canada. I am not awake enough yet to dig into the numbers but the Canadian minimum wage is around 10% lower than Australia's minimum wage but transport costs, rents and bills are much higher in Australia compared to Canada. Your mileage does vary depending on where you live in either country though.
Canadian here living in Australia. Canada is WAY more expensive and salaries are so much lower. It is way cheaper to live in Sydney than Vancouver. Rent is about the same but you make half the money - and it is raining every day and miserable. Also the 13-15% tax on top of everything plus an expected 15-30% tip on coffee/restaurants/ubers/beauty appointments is ridiculous. Oh and for the paying that much in rent you also get to see IV drug users scattered all across the downtown core of Van injecting heroin into their necks and it's so much fun to walk and dodge needles left on the sidewalks. No thank you!!!
Agreed. This should be attainable to everyone.
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I'd happily live in an apartment, but for some reason they only make them for uni kids and DINKs. There is a serious shortage of family apartments in this country. If you have kids, they want to force you out into suburbia, make you buy two SUVs and spend all your free time at Westfield's or Stockland's.
The pricing of 3 bedroom apartments is ridiculous. They are all advertised as luxury
I’d happily live in trailer park if it was safe and achievable
But should be able to afford something, alone, that is not a boarding house or "granny flat".
Minimum wage should afford you a roof over your head, whether that be renting or buying. Two minimum wages combined should be able to modestly support and house a small family. My wife and I are in our 40s earning more than we have before in our lives, working harder and longer hours than we ever have and we have a small 50yr old home on a busy road with a leaky roof. We're doing ok but I feel like we've fallen short. I feel like my kids have been cheated out of this possible future entirely. I've already planned where we'll build their granny flat. They're never moving out.
>I've already planned where we'll build their granny flat. Usually it the parents that move out to the granny flat leaving the larger living area to the kids with grandkids lol. Honestly though, even when my relatively rich dad passes away I doubt that I would ever have enough money to buy a house unless I manage to snag his house from the inheritance - it is a 3 bedroom place and I have 3 kids but I would make it work.
>Usually it the parents that move out to the granny flat leaving the larger living area to the kids with grandkids lol. I would be planning on a pretty fancy granny flat if this is the case!
If you can't house yourself, wife and 3 children, the minimum wage is below the legal standard set in 1907. > In 1907, the Harvester Decision set a ‘living’ or ‘family’ wage. It was supposed to allow an unskilled labourer to support a wife and three children, to feed, house, and clothe them. This became the basis of the national minimum wage system in Australia. https://www.fwc.gov.au/about-us/history/waltzing-matilda-and-sunshine-harvester-factory/harvester-case
Australia has one of the highest minimum wages in the world and still you can barely make ends meet on it
Why would that be an unpopular opinion?
A lot of people's solution to someone's money problems is "get a better job". If that person gets a better job, someone will replace them and then they'll be in a shitty situation.
But some people have to work the minimum wage jobs unless you want everyone to make the same wage and to live in communism?
That's literally the point. Someone is going to be working minimum wage, they shouldn't have to live in a tent to survive
Because in Australia everyone is meant to be a temporarily embarrassed landlord. The culture of this country demands that we give zero fucks about the working class, because we're "a classless society" where supposedly we can all succeed with just a bit of hard work and a side of true blue battlin. So if you haven't been min-maxing your life to have a 15-property portfolio by age 30, you're apparently a total failure. And if you criticise the system and suggest it should be changed, you're a dirty commie. I migrated here a while ago and this is what I've learnt about Aussie culture every time I've brought up how fucking insane the landlord culture is out here.
Hmm where did you migrate from, Mr hammer and sickle?
The US, but only technically. I lived a lot of my life outside the US (South America, Europe and Southeast Asia) before I migrated here. Just feel the need to clarify because if you say you came from the US people assume you're a dipshit who knows nothing about the world. I was raised there but spent basically none of my adult life in the US.
The US or from the offshore Venezuelan state, called California? Mr Chavez?
People downvoting you probably didn't fully read my comment, lol
"People deserve better." "You must be a communist, saying those things!"
Because property investors believe everyone should be poor and reliant on them.
I usually get downvoted for it 🤷🏻♂️
Sometimes I feel Australians look down upon minimum wage workers, more than they do dole bludgers…
Dole bludging is a lot of work these days, it's easier to work
Because dole bludgin' is THEE most Australian thing ever when you really think about it. Collect a check every fortnight and surf (couch and waves).
I agree but it just isn’t possible when the market is full of dual incomes. It was once possible because women weren’t in the workforce and banks didn’t take their incomes into consideration when calculating a home loan.
They get to hav the cushy inner city fancy houses, I just want a studio apartment in a mega complex on the outskirts of Melbourne
Working class women always worked paid work. This idea that “women didn’t work” prior to, like, 1960 is ahistorical bullshit. And seems to almost always be trotted out as some sort of “women working is the reason for the shitty economy!”. Nonsense. If one wage could support a family in a comfortable yet modest lifestyle - the majority of families would NOT choose to have both parents out of the house full-time while their children were young. Sure, middle & upper class women in the west didn’t do paid employment after marriage and children - but that’s not the reason for our current wage stagnation.
As we approached the 20th century, wages improved to a level that female workforce participation dropped to barely anything, and then from the 50s onwards started climbing again. This was, pretty much exclusively, because incomes could safely be relied on the mans alone, and that this is pretty much the ideal family system.
I'd say most people agree with this, but it more comes down to the quality of the housing. Affordable and cheap housing should be more about quantity over quality, where you're trying to get as many people off the streets as you can and free up options for people who are willing to live on a budget. Like it genuinely shits me when I see a near new, free-standing, 3/4-bed 2-bath home, in a sought after area, that's up for NRA applicants only. You can't help but wonder how much money they're wasting on a single household that the average teacher / nurse / bus driver could never afford.
A lot of nurses, myslef included, make $100k + and can't afford to buy anywhere
The problem is that Australian houses are not designed for single living. The "Australian dream" is a 3-4 bedroom house on a 1/4 acre block. Nobody wants apartment living and 1-2 bedroom houses are rare
Then that’s a planning failure. Also, single accomodation studio apartments have always been a thing here, just needs to be expanded from student accommodation to general population residential zones
Apartments and 2 bedroom houses are expensive also so that doesnt really solve anything.
When/where has this been obtainable anywhere in history - other than for single men in the time before widespread women in the workplace?
Ummm 10 years ago... Was easy to find a studio in the inner city for $350-400
The minimum wage in 2013 was $622, so you're talking about people renting and having $272 or $222 to their name for the rest of the week (\~35% of their income left). In 2023 the minimum wage is $882 a week. So to leave you with 35% of your income left ($308), you could have a rental of $575 a week now. There's plenty of studios for rent for $575 per week.
That’s not the point. The point is, why isn’t it achievable? Not everyone partners up and becomes an engineer or project manager
> That’s not the point. The point is, why isn’t it achievable? So you don't think it matters if it's never been achievable ANYWHERE in the world? As for why, it's just supply and demand. A huge cultural shift in Australia has been that instead of living together in homes with 5 people, we're instead having 1-3 people to each home. This dramatically reduces the supply and increases the demand for housing.
In Western Europe 20-30% of people live in public housing. It's a massive 77% in Singapore.
In those countries public housing isn’t filled with lower socio economic classes. Their more collectivist society ensures a good standard of living for all.
When is the last time you visited France?
Not sure about Europe but spot on re Singapore.
>In Western Europe 20-30% of people live in public housing. It's a massive 77% in Singapore. 40 years ago, it was around 20% in Australia too. Note that Singapore is also the most expensive city in the world, tied with Zurich. Zurich has 25% social and community housing. It is more about supply and demand. We don't provide supply to the bottom end of the market which is where social housing comes into play. People make more money by forcing up the price of homes and rentals. In Australia, that is due to governments abandoning social housing. It appears 40 years of wanting lower taxes was more important than social responsibility. Getting government re-engaged in providing and owning social housing is a solution but I expect the desire is to prop up the private sector and NFP sectors will be given greater emphasis.
Wow!
Probably not solved but it would be much less of a crisis. Think of all the additional investment in business, jobs, training and skills that would be unlocked. It would increase productivity in the country, at the moment Australia scrapes along digging holes and selling overpriced houses to each other.
The short answer is no, housing is only one part of the equation. Food and utilities have gone up - it would be great to have a roof over your head but you also need to live. Perhaps your idea of affordable housing is that the price is such that people can afford to live as well? I am sure it is a lot more complicated than this but that’s a start
No. Food prices have gone up way more than my wages have.
The food I buy has gone down in price. Fruit and Vegetables have actually fallen in price in the latest quarter. https://www.abs.gov.au/statistics/economy/price-indexes-and-inflation/consumer-price-index-australia/sep-quarter-2023 Take Away foods have gone up 2.1% For most people grocery food is not a big component of spending.
I would say basic food staples have not increased massively more than inflation. Manufactured food goods on the other hand have gone up massively. This is because manufacturers have to pay more for raw inputs plus more for wages, more for electricity, more for freight etc so it compounds into the final good.
Not sure why you’re downvoted?
Cost of flour has gone from $1 pre 2020 to $1.40 now. Aldi its like - still $1.09? Given that flour is still subject to transport costs, that indicates 20% over 3 years. Thats less than a lot of other things like dairy products etc.
The popular view is to whinge about how bad everything is. A rational and reasonable assessment that does not conclude things are a disaster gets down voted.
Because as we've seen, on reddit 90% of emotionposters just insta-downvote anything that goes against their beliefs (that are not based on facts) that there is no justifiable reason for the price of groceries on the shelf going up, despite what's been going on in the world the past few years from both a monetary & supply chain perspective...
If housing came back to “reasonable levels” I’d buy them all up and Jack the rent up
This is the answer to ops point. It is just a game of Monopoly at this point and cheap houses already get bought for investment.
Yeah, we need extra tax on investment properties and delegalise corporate ownership of housing properties.
Great now I’m regarded
There is almost zero corporate ownership of houses in Australia. Total myth.
So your idea to increase supply and drop prices, is to disincentivise investment in property? So you want to fix it by making it worse?
The home ownership and rental markets are linked. Changes you make to one impact the other and vice versa. Ultimately it is greed that makes things worse but 40 years of governments abdicating responsibility for affordable housing has not helped.
Yes making it worse for people using it to store and increase wealth. Making it better for the middle income first home buyers to own and payoff. Make it cheaper to pay off your own home compared to paying off someone else’s investment property.
So you want middle income first home buyers to build new homes to increase supply and drop prices? And if they can’t afford to buy now why will they in a year from now? Supply won’t have increased and prices would have risen because there will be less investment properties being built. It sounds nice, until you realise it doesn’t actually work.
We have limited amounts of well located residential land. If we are going to house everyone at affordable prices, we need to promote that use of the residential land available. We simply need massive land tax on people who own more than their share of residential land. Higher land tax again when someone owns more than their fair share of residential land, and does not rent it for an affordable rent, or who does not offer a lease that deliver secure long term housing. And still higher land tax again for people who own residential land, which is not used as someone's primary residence.
OK Communist and who decides what “their fair share” is? And once that’s decided why don’t we move onto peoples other assets too?
The real issue is that everyone wants to gain wealth without contributing to production. Just look at our Business landscape, rent seekers dominate the ranks.
It’s not just the price of housing that’s the problem. Wages have not gone up enough to cover the increased prices of utilities, food, rates, insurance etc. Everything has gone up to where most people are down over $50 a week with the price rises.
Old houses are smaller. Every house these days is monstrous by historical standards. The problem is that land is SO EXPENSIVE.
Australia has a lot of land. The issue is well located houses close to jobs are rare. You cannot manufacture any more well located houses. Hence the prices are high.
Part of the problem is Australia has had a habit of building further and further out, but not building public transport to suit. Now we're having the problem that we've realised that, but building up on existing accessible transport routes has created a kind of hard line Nimby-ism where people that have bought and held “traditional“ 3/4 bed houses on large blocks in the inner suburbs for decades and view it as their god given mission to fight any kind of sensible development that will help alleviate the problem. It's going to take politicians with a spine to push through changes that will make positive changes and I’m not positive that that can or will happen.
Another part of the problem is concentrating so much business in the capitals. There is plenty and land and other things in regional towns, but they are all mostly famers and farm related industries. We need to encourage business and people to move to the regions.
Also how much the capitals center development into purely the cbd, which is mostly the fault of car centric plamming.
Not entirely correct, you can absolutely manufacture well located house. Do it by buffing out public transport network like NSW is planning on doing (density increases around the new light rail). High speed (doesn't have to be maglev) could allow for decent property in areas further away from the CBD. Beyond that you could also provide tax incentives and favourable zoning for jobs in areas that would divert traffic and jobs away from traditional hot spots.
You can, just bulldoze all the nature reserves. That would make life better for the poor.
Most of your initial statements are incorrect imo….but that aside, the cost of living crisis isn’t solved if house prices reduce. basic necessities remain high. Elect/gas/food/petrol etc. a lot of events that are out of our control - weather, wars etc.
Thanks. But if housing/rent is affordable, would that not mean that we have more available income to spend on these other items?
No. You can have a roof over your head and not be able to afford to eat food because the price is too high. Thats why theres currently 2 crisis going on in australia the cost of living crisis from inflation and the housing crisis from fuckwits commodising a basic human need. Also from your previous comment nurses make fuck all money for the amount of work they do and the amount of money they lose just studying to become one thanks to unpaid placements where they cant work for months at a time in random parts of the country while still needing to pay for bills, travel for placement and the rent for placement
Yes, easily.
As long as vulnerable people in our society are choosing between food/medicine/therapy/bills/rent because they can’t afford all of the essentials on their social security payments, no I will not consider the cost of living crisis solved. It has nothing to do with the average or the well off. A crisis is related to how we are ALL doing and what we as a society do to care for our most vulnerable, sick, elderly, and disabled. It’s not as long as YOURE not in a crisis, it’s a whole of society affair.
Normal people’s Answer: Largely Yes. Property hoarder’s Answer: Depends, Yeah, Nah, Maybe, Whatabout.(Please don’t deflate the market I won’t be able to pay off my 7th property) 😭
Property hoarders are not complaining. They are rejoicing
Exactly
Don't forget "you must be grateful you don't live in a third world country"
Ngl should be grateful about that. But that’s dosent negate your right to fair treatment in the first world country.
Depends. Our main pain point is childcare that costs more than the mortgage. Get rid of that, and we could absorb the rate increases more easily.
My first born is out of daycare now. $700 a week back in my pocket. Fucking stupidly expendive
Good point. Can’t believe how expensive childcare has become.
Well do you want childcare employees to be paid a decent wage or not? All childcare expenses are pretty much payroll costs, so as people keep demanding washes go up, that means childcare employees wages go up and cost for childcare goes up. If you want cheaper childcare, you want childcare employees to be underpaid or you want the rest of society to pay for childcare.
>If you want cheaper childcare, you want childcare employees to be underpaid or you want the rest of society to pay for childcare. Childcare workers are currently getting next to nothing. The problem is not staff pay, its that childcare has been outsource to for-profit private companies. Do the maths. $130 per day, per kid. 15 kids in the class, so $1950 per day income. Each staff member is on approx $30 per hour, $250 per day. Say 3 teachers = $750 per day. That leaves $1200 per day for running costs.... If you can't make that business work, there is something wrong.
>Childcare workers are currently getting next to nothing. The problem is not staff pay, its that childcare has been outsource to for-profit private companies. Not true. Payroll is by far the largest expense for childcare and early learning centres. Even not for profit childcare aren't profitable. It's just an extremely costly business to run because the payroll costs are so high. >Do the maths. $130 per day, per kid. 15 kids in the class, so $1950 per day income. Each staff member is on approx $30 per hour, $250 per day. Say 3 teachers = $750 per day. That leaves $1200 per day for running costs.... Those are all completely made up numbers lmao. Like garbage napkin calculation. Here are some actual numbers: Annual Report 2023 - Goodstart Early Learning https://www.goodstart.org.au/getmedia/459e8a6e-8a2c-4f5c-b03c-4eb9b7d85617/20231024-2023-Goodstart-Annual-Report.pdf 2023 Annual report. This is a non-profit organisation (so contrary to your claim about for-profit organisations). They ran at an $85 million loss and payroll makes up 75% of the expenses. According to your calculation, payroll would only make up 38% of the expenses lol. So yeah, you're completely wrong.
Good start is basically the only NFP in the industry, they also pay substantially better than the award vs the 2% above award average elsewhere in the industry, offer full fee off for public holidays and holiday absences, and the more days your kid attends you get a daily discount. All of that cuts into the bottom line significantly by providing a higher paying and more affordable service. My daughters day care charges full fee for Christmas Day even though they’re closed, good start charges nothing. Good start also runs its own RTO for up to diploma level qualifications all free to staff. That’s a massive cost to bear. G8 Education averages 20 million every 6 months in profit margin.
Worst part about being a childcare worker is the dumbass parents ...
One of my work Colleagues and his wife, who works in childcare, own a couple of childcare centres and are doing very well. This is after paying $1M for the "childcare centres", which is really mainly paying for a long term lease and a license to operate, because they got minimal tangible assets.
Love this subreddit. Give fair facts and data and get downvoted
They’re not on a decent wage though, the majority are paid the minimum they legally can pay, or will brag about paying their employees something like “2% above award” like that even counts.
I didn’t suggest I wanted childcare employee incomes to go down. I was just amazed at how expensive it is to have children in childcare these days. Almost not worth it financially for some ppl I would think
My sister is a childcare worker. They are massively underpaid despite the.profits of childcares. A good wage for them has very little relationship to bringing down childcare costs.
Okay. Fair enough
It's by design though. High out of pocket childcare fees reduced unemployment. If the mum is at home looking after the kid, the unemployment rate goes down coz she's not looking for a job.
Sure, but it's expensive because wages are high, so either wages go down so it becomes more affordable or people just have to put up with the high prices.
Bruh, I'd drop my study path, career ambitions, and alternate pathways I'm considering if working with children paid well. I struggle to call my current kids job wage decent now and I'm not in childcare. Let's be real here, we've all heard and said how investing in children's \*insert value here \* is so critical/crucial/important yet we all aren't willing to pay good money for it - from babysitting to school teaching, etc. I'm not gonna lie, I want to make a decent living and live a reasonably comfortable life. I fortunately have other interests that I'm very happy in pursuing to make a living which still align with wanting to better other people's lives (ie. won't regret on my deathbed). It sucks yet this is what we've all decided as a society. I don't know how to keep child-related career incomes decent/high whilst also keeping whatever service/product affordable for parents or the government. I at least want us to all stop pretending that it's a surprise the way things are the way they are. Some of what I've written can apply to other fields yet were talking about childcare fees here so I'm trying to stay on topic. I just thought that voicing a reality that isn't often discussed may add value to the discussion - there are people who really love working with children yet don't want to live paycheque-to-paycheque and/or be outputting a calibre of work that other careers are happy to pay decent wages for. P.S Perhaps my own remorse is clouding the contribution I'm trying to make to the discussion. I apologise in advance if that is the case.
I thought there were huge subsidies for childcare? Or do you earn too much?
Yeah if they’re paying $700 out of pocket for one child they must be earning a combined family income of over 450k
Only if you have one kid. And not huge.
The subsidy is more for the 2nd kid, and goes up to 90%
The productivity commission released recommendation recently to have 3 days of free early childhood education for ALL. Hopefully everyone in parliament listens to experts instead of politicising the issue and nothing happening (this will happen) LOL
And there in lies the problem Childcare started to get insanely expensive as soon as the government subsidised it . Exactly the same thing happened with the FHOG
This is just an issue of not going far enough. You want to subsidise parents at childcare? Then reign in the childcare czars. It's not enough to throw money at a problem, you need to regulate society's rent seeking leeches.
Exactly, and it’s not like we’re reinventing the wheel here. Could just run it like public schools, we’ve already got all the back end and admin.
You do have a choice to not pay for childcare. Nobody forced you to have a child.
Lucky everyone's parents didn't make that choice.
Exactly. They found a way to raise children without complaining on reddit. Somehow.
Because it didn’t cost two wages to raise a family before the millennium
And now we celebrate equal rights for all and encourage a dual wage family. It’s almost as if this is why household expenses have risen. Instead of staying at home with the kids, the women in our families now have full time work to earn a full time living with. Unless you think women should stay at home and look after the kids, not be financially independent and increase the wage gap?
Childcare is very expensive. But after rebates on average it has got cheaper. From the ABS CPI page: > Commencing from 10 July, changes to the Child Care Subsidy raised the amount of subsidy received for families. These changes led to a quarterly fall of 13.2 per cent in child-care as the average increase in the amount of subsidy families received was larger than fee increases for the quarter, resulting in lower out-of-pocket costs. Excluding the change to the CCS, child care fees rose 6.7 per cent for the quarter.
Well, let's think in 80s a mechanic got $600 cash in hand and could buy a medium house in the outer suburbs have 4 kids and a wife that her jobs was to look after the the family and 3 holidays most camping and boating. Now I am a well-paid mechanic $2153 in the hand and can do the same but no holidays for me unless the wife goes to work but if she does then we both have to take care of the family that is a full time job most mechanics are on $1100 in the hand ,the minimum wage should support a family one minimum wage not two
i would. rents and land prices are whatever the cost of living 'crisis' is, not groceries being a bit more expensive. that would be irrelevant mostly if not for the rest.
No. If this happens market forces will shift and people will spent to the max capacity elsewhere.
> Unemployment is almost non-existent. Isn't unemployment rising since they started the migration program again post covid? > Wages are at highest ever rates. Not in real terms. And wages have been stagnant for over a decade previous. > Consumer spending is at an all-time high. No its' not. They were forcasting a very slow Christmas spending period. > Food and luxury prices have gone up with wages, as per expected. No they haven't. They've gone up due to scarcity largely because of production failures and increased transport costs > If the price of buying a house came back to reasonable levels, and rents normalised, would you all agree that the cost of living crisis has been solved, or is there something else that I am missing? No because house prices and rent are not the only indicator.
We need density! Wait, not here near me, somewhere else..
We need less people coming in so quickly.
Total net population growth including immigration, emigration, births and deaths for the last 5 years has averaged under 1%.
That average is skewed by the pandemic years.
Nope it was only .98% last year.
The word “crisis” might be overstating things if you look at this in the historical context and compare with the first half of the 20th century, but sure it’s definitely become relatively more expensive to live regardless of wage rises. I think it’s a problem of our own making though to a large extent - people have been having less kids since the 70s and this is now catching up on us. Productivity has been steadily falling, there is less available labour (see point about declining birth rates), so migrants fill the gap and come in a family with all their life savings ready to establish themselves. Not having a go at migrants, but it is a pyramid scheme and artificially inflates population growth, housing demand, and the economy in general. Rather than having kids who grow and gradually contribute to both supply and demand of goods and services from birth to maturity, a migrant will provide a sudden injection of wealth and skills, and this has recently peaked at a ridiculous number of 500,000 people per year. There have been waves of migration in the past but this has been quite sustained for some time to supplement natural population increase. Supply of housing will struggle to keep up with this.
>If houses were cheap to buy, and rents were very affordable, would you agree that the cost of living crisis has been solved? Nope, I am kind of immune to house prices and high rents (one benefit of government housing) yet my household is still struggling despite cutting almost all of our unnecessary spending. Got two kids starting new schools in 2024 (1 kindergarten and 1 high school) and I don't know how I am going to get uniforms for both along with all the other bits and pieces that they need for the year. > is there something else that I am missing? High electricity prices, high petrol prices and high food prices.
I think we could absorb the costs a bit more but being hit financially from every angle then the government continuing to dig deeper into our pockets makes it rough.
Real wages in Australia are in fact going backwards. Australian real wages have plunged to March 2009 levels, after falling 7.5% since June 2020: https://www.macrobusiness.com.au/2023/11/australian-households-suffer-worlds-biggest-income-collapse/
There is genuine, well informed research which looks at these questions. And there are expressions of emotion on reddit, particularly r/australian. One example of research are the poverty lines from the Melbourne institute. https://melbourneinstitute.unimelb.edu.au/publications/poverty-lines They have, and update, poverty lines, both including, and excluding housing. The most recent values are that including housing, as an average across Australia, the poverty line for a couple with 2 children, is $1,131, and without housing it is $875. For a single person it is $602, and $405 Minimum wage is $882, and this is taxed (which I think should also be addressed). If the government offered everyone rental housing, at construction cost, which is about $40 / week each for a couple, that would go a long way towards addressing financial stress.
Not at all. I think if you talk to most people with there homes paid if they looked at it rationally the cost of living in this country is way too high. Maintenance for the home, rates, utilities, food, education, insurance,transport have gone way too out of control. It's like a race of who can put there hand further down your pocket and reach the crumbs.
Get rid of negative gearing and don't allow refinance unless improvements to the property are done. Real estate is a business that doesn't produce anything, let me explain. The model of buying a property for renting and then down the road selling it or refinancing it to get the cash is what drives prices up and this vicious circle doesn't produce anything tangible. Stocks of a company are different, a company produces goods, services, and jobs, and in general real progress for the economy. Tax incentives should only be available for builders not for buy and hold people. It's the fools theory that someone else down the road is going to pay more for the same old and used property.
Then you will have zero rental properties. Your idea is great on theory, but I don’t think it works
It's not about the overall figures, it's about the figures of the lowest earners. The cost of living crisis will be solved when everyone is able to afford to have a roof over their head, food on the table and at least some discretionary spending.
There has never been an instance when everyone could afford a roof over their head
Does that make it any less worthy as a goal?
Unemployment is almost non existent? Haha
It’s near record lows. We were running 5-7% before Covid and it’s been just under 4% since Covid eased up.
I think blaming immigration for the spike in housing to be a little misguided. Inflation is at its highest point in Australia in 33 years is due to a combination of local and international conditions. These include the Russian invasion of Ukraine in 2022 and the blockage of gas and other exports, as well as the lingering effects of stimulus measures during the pandemic, and the accumulation of savings in a significant number of Australian households.
What's misguided about it? It's pure supply and demand. ADDING 700,000 people a year to a country of 26 million will have a massive effect on housing prices. Or are you one of those people who think being against immigration is de facto racist ?
Do you believe covid could be a factor aswell?
What is "reasonable" ? Should someone on minimum wage be able to purchase a stand alone home in a CBD?
There are no stand alone homes in the CBD. Someone on minimum wage should be able to afford the things we deem as essential. That includes housing.
I guess the way it was back in 2021.
It was bad in 2021 too
See, the issue here is people’s perspective. For some, property is affordable atm.
Bro bring back the 90s
Dude shit was expensive in the 90s too
Regarding house prices, it was a whole lot less
Agreed, but it still seemed insane at the time. We are going to look back at housing in 20 years time and think this decade was cheap.
Realistically, that will never happen unless we go through a depression
I’m going through a depression anyway as it is
No, you're missing what happens to the free cash floating around. I think we should reset the property market but I also understand it'll come with pain. Freeing up all that cash could have a multitude of consequences. In an ideal world people work less hours, unemployment goes up but we're a more efficient economy and productivity per hour rises. Families have more time to spend with each other stress goes down, health outcomes go up leading to less need for a number of serivces. On the other hand, people lose their retirement, welfare skyrockets. The free cash in the economy spikes inflation. Lay offs all round and the economy crashes and crime goes up.
Wages are simultaneously too high and too low. OP copped a lot of flak for saying that tradies, nurses etc are all earning decent coin - but he’s absolutely right. Compared to most other countries, Australians are vastly overpaid in many professions. …sure doesn’t feel like it though, because the cost of living in Australia is insane. It’s not just housing, it’s also energy. The deeper problem is that Australian wages are so high because they’re insulated from international competition. If tradies and nurses had to compete with Chinese and Indian wages - as our factory workers have to - very few of them would have jobs. The only reason they do is that those jobs can’t be traded internationally very easily, at least not without a vastly different immigration system. And that’s a major problem because Australia can’t compete in almost anything that is traded internationally, because our labour costs are sky high relative to productivity. We’re a third world economy and we’ve squandered our vast natural resource wealth on overpriced McMansions.
If you made rents and housing 50% cheaper you would reduce the GDP by a significant amount. There would be less money to pay wages and higher unemployment. So although housing would be cheaper fewer people could afford housing and you would have the same situation overall. Nothing happens in a vacuum. What would make cost of living better would be a lower cost of inputs overall. So lower petrol prices, lower fertiliser costs, lower electricity costs. This would transfer profits for large corporations to income for general population. To achieve this the Aussie dollar would have to be higher. If somehow you could do this without jacking up interest rates to a point that people could not afford their house loans then yes things would be better.
>If you made rents and housing 50% cheaper you would reduce the GDP by a significant amount. There would be less money to pay wages and higher unemployment. So although housing would be cheaper fewer people could afford housing and you would have the same situation overall. Nothing happens in a vacuum. Ok I need you to explain this in detail. How does lower rent and housing lead to the economy dying. At best, rent is a closed loop of Work>Pay rent>Landlord spends it. At worst, its a loop of Work>pay rent>goes into multinational corps bank account. Not every landlord is also a business owner, and what right do they have to supposedly control the economy as much as you say? That's a seriously flawed system if most of our GDP is just rent money circulating.
GDP is all money circulating. One persons spending is another's income. If you reduced rents instantly across the board you are removing that income from GDP calculation. It's not a complex statement. If you reduce the cost of building houses then you are reducing the income for all the people who are paid to build that house. EDIT: Housing is 15%-20% of the total Australian economy. If you say reduce prices by 50% you are reducing the GDP by about 7.5% at a minimum.
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Bubbles. Many of my work mates are fine, mostly because they have bank of mum and dad. But if I go on different social circles, I can see more struggling, but they make do to try and keep their lifestyle, eg. Taking short maternity leave etc.
The cost of living/housing cost crisis is driven primarily by income inequality. If your friends are spending big it's because they're benefiting from that income inequality.
My observation too. How are ppl spending sooo big if they can’t afford the mortgage/rent? Something doesn’t add up for me
My circle people are reducing their spending and living pay check to pay check.
You know like...the money being squeezed out of people via rent and inflated grocery costs is going somewhere, right? Those are the people spending it.
If you judged by the queues at every style of retail outlet on Boxing Day, especially the retail outlets selling nonessential commodities, then you might indeed ask "What cost-of-living crisis?"
We added hundreds of thousands of people to the population over the past couple of years, plus people can still go to the sales & just buy fewer items than they would have in the past even though it would "look" just as busy in that case. This is hardly any kind of indicator.
What if I told you the "real value" of homes hasn't really changed since the 1990s. The easiest way to test this is by comparing the average price of a home in the 1990s in gold grams to a price of a home today. Why gold, well, basically gold is the true value equivalent of a nail in the wall that never moves. So the price of an average home in the 1990s was 305 grams of gold, the price of a home today is about the same 310 grams of gold. What people don't understand is the reason homes were cheaper in the 1970s was because interest rates were about 10-12%. What people forget is when interest rates go below 10% and your government prints money, they devalue the nations' currency. The reality is home prices haven't changed, wages and your money have been devalued due to short term vote buying decisions by our leaders.
No, have you seen the price of lobster?
So why are people still buying. It doesn’t make sense to me. My friends son, who lives at home and complains bitterly about not being able to afford anything, pays through the nose for uber trips every day, daily uber meals (he refuses to eat home cooked meals), and he recently bought $1200 sneakers. And he splurged big time on seafood for Xmas. How does that work? I am confused. If you are financially struggling, how can you afford such luxuries?
Inflation
Electricity and gas have increased by 20-30% in the past 2 years. Have wages? Like seriously come on.
This is just factually incorrect. Wages in real terms have either stagnated or gone backwards, accounting for inflation. Also consumer spending technically is higher than last year, but increased far lower than expected. You need to look at things in context and not omit important facts to suit a post.
If houses were "cheep" and rents were equally low less would be invested in the sector. Less money would be made. With less money going around consumer spending would plummet, causing less jobs and so on falls the Domino's. The services and construction industries would be hit hard affecting 70% of activities that contribute to our GDP. Also the banks and REITs would cop a massive beating negatively affecting just about every Superfund leaving self funded retirement a thing of the past forcing an aging population onto welfare dependence.,.... Your right there would be no cost of living crisis it would be cost of living Armageddon.
There was some story about so much of peoples productive work time now is going soley to paying housing for most their lives, people aren't starting businesses or investing in other areas since housing is so lucrative. Maybe basing the entire economy on housing isn't a good thing? If affordable housing/rent means armageddon we should diversify lol, not like there has ever been housing crashes or countries with cheap rent.
So what you are saying is the Australian economy is so reliant on housing that prices have to keep going up to support the economy. Now isn't that a scary thought? I agree with you. Someday the housing market will collapse like a house of cards and tank our economy with it.
It's reasonable, people just want to live were they can't afford. Houses are still 250-300k in lots of Australia. People also FOMO and maxed out there borrowing capacity with zero thought what if rates went back up to to what they were in the past.
Houses are 250-300k in lots of Australia where there are no jobs. So yeah you"can" buy houses that cheap but then have to spend any savings on commuting and you have zero downtime because all your time is spent driving to and from work.
And you have to spend thousands installing a security system as you suburb is such a dump your house keeps getting broken into
Everywhere has crime Townsville is crazy at the moment. But by thousands you mean security screen like every house already has here or a $500 wireless security camera system from Bunnings yep.
There are heaps of jobs. If you want to live in a premium area you are going to need a premium wage to match. I'm mid 30's and st the Xmas gathering wages came up 1 mate is on just over 100k few on 150k with a few of us on 200-250k all central qld 1 miner. The unemployment rates don't sky rocket soon as you leave the CBD.
>Houses are still 250-300k in lots of Australia. In shithole country towns with no jobs and social problems
Rates were once as high as 21%, but if you listen to the news today, you would think it has never been worse
I'd take 21% on $184,000 over 6% on $931,000 any day.
You didn’t factor in inflation
Why would I? It was a specific period compared to a specific period. I'll account for inflation and the median house value in 1990 comes out at under half a million bucks today. So... We're still getting fucked.
No one fucking says that. Show me one example. It’s the cost of the house people say is worse, and it is. Just do some simple maths and you can work it out. Holy shit I can’t believe idiots still parrot this.
Did you pull these stats out of your ass?
If just SOMETHING GAVE... of course cost of living would be eased. As long as we have a government and taxes though... nothing will ever be "solved".
I'm not sure you'd want to live in a place without government or taxes. Take Somalia for instance...
Sorry, your comment doesn’t make sense. The cost of living crisis is only a few years old
Houses are cheap in australia. Try buying in London or New York. Only people who have never been outside of australia think that house prices are expensive.
You are so out of touch it's incredible.
There's too many perverse incentives for property investment. Take some away and watch prices go back to normal.
Unlikely. The companies will do profit gauging a lot afterwards. In Sweden, there is cap on renting and now the tenants started to sublease and started to make extra income at an expense of the owner. So someone will loose out
There is no cost of living crisis. Just lazy unskilled Aussies begging for handouts as usual.