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Australian treasurer Joe Hockey has come under fire recently for his comments on housing, and in particular, Sydney housing.
Here are two of his comments that garnered the most attention during an interview:
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“The starting point for a first home buyer is to get a good job, and pays good money.”
“If housing was unaffordable, no one would be buying it. People are purchasing housing in Sydney.”
Far from being out of touch as the media and his political opponents have claimed, I cannot see how anybody in Australia could disagree with either of those comments.
Out of interest, academic website The Conversation ran some articles on the topic, with room for reader feedback. I have quoted some readers’ public comments randomly here:
“I’d like politicians like Peter Costello (who contributed considerably towards housing problems Australia now has), to be dumped into an inner city on Newstart [allowance] and be told to survive. A social experiment. Abbott and Hockey could try the same.”
“We as a nation are paying for investors to maintain or more likely increase wealth, at the expense of the next generation and anyone on a low or minimal income.”
“Think housing, think greed!”
“I am looking forward to the day when the property bubble in Australia finally bursts and Australians, particularly the baby boomers, are brought kicking and screaming back to harsh reality.”
If you read similar posts on GetUp! or Facebook, the above comments are tame.
Many of these comments are highly emotive reactions with a foundation in the individual’s self-interest or ideological predilections. Housing seems to be one of those dinner-table conversations where everybody is an expert. The irony is that the drivers of the housing market are so interwoven and complex and multi-faceted that a short conversation or shallow analysis is meaningless.
Often, housing is a reflection of one’s political beliefs as much as anything. Left-wing individuals believe that everyone should be entitled to own or rent affordably in whatever location they choose to live in. Right-wingers generally believe that you take responsibility for your own future, study and work hard, and do everything you can to advance yourself and your family, including buying a home and maybe even investing.
Australian housing is a somewhat unique asset class in that it is one of the most stable asset classes in terms of value, as well as one that delivers consistent revenue through rental income. That is a powerful mix for investors who seek lower-risk investing, with generally predictable capital growth over a long-term period.
At the same time, housing provides a basic societal need, and rising house prices and rising rental costs can be particularly unaffordable for those who are on low incomes – especially government benefits and allowances. Of course, such publicly funded allowances are provided as a short-term level of assistance until employment can be found again – not as a means to sustain comfortable living conditions over the longer term.
Stable property prices are critical to the long-term wealth of Australia and Australians. It is critical to the health of our financial system, which in turn feeds small and large businesses, which of course is the source of employment.
It is crucial to the future of all Australians. It is just the short-sighted, self-interested or less insightful that don’t understand that, or even care to. And it is impossible to try to explain otherwise.
