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Digressions – Bob’s top gripes for 2023-2024

Yes folks, it’s a list, and not just any old list. This one selects (just some) of the things that gave the writer an urge to pen ‘outraged father of one’ letters to newspapers in 2023. All are ongoing issues in 2024.

Cash is King

Kudos to our local Credit Union teller who happily counted bags of coins and deposited them in our respective bank accounts. Some banks are no longer providing such service options, claiming to be ‘ cashless’.

We have encountered (as have you), instances of retail outlets (restaurants and bars) who refuse to take cash. Last time I looked up the legislation, cash was still ‘legal tender’. Did you know that includes one and two-dollar notes, phased out in 1984 and 1988 and replaced with the very same coins we took to the Credit Union. Go figure.

While it may be very old school to secret coins away in a container for use at Christmas, this year She Who Hoards bought a bottle of Mumm and a quality red with the proceeds. It’s called saving.

Help yourself check-outs here to stay

Major Australian supermarket chains will probably persist with their policy of encouraging customers to scan their own groceries at self-service check outs. I am one (and we are many) who refuse to do this.

The major chains will tell you they are employing more people than ever to cope with new shopping options (on-line delivery). But clearly, fewer staff are required when a store has (for example) eight service check outs and eight self-service stations. There is usually at least one employee in the self-service areas, ostensibly to ‘help’ people but more likely to spot opportunistic theft.

Large retailers including Booths (UK), Walmart and Costco (US) are reportedly winding back their self-service options. Booths is removing self-service check outs at 26 of its 28 stores, saying its customers rejected them as ‘unreliable and impersonal’.

News Ltd quoted a Marks and Spencers executive that self-service check outs lead to what he called ‘middle class shoplifting’, that is theft by people who normally would not dream of it but are motivated by an “I’m owed it” attitude.

Shoplifting is up 20% in Australian supermarkets, although there is no break-down as to how much of that is down to self-service customers leaving stores without scanning some items. Supermarkets have always had losses due to staff pilfering, shoplifting and fresh food wastage. The industry calls it ‘shrink’ and it’s factored in to financial operations.

Homeless, diamonds on the soles of their shoes (not)

If anyone’s keeping a list of things various governments promised to do about housing, prioritising the homeless is not one of them.

It’s a weight of numbers thing, true, and homeless people are more likely to gravitate to States where it is possible to live outdoors most of the year. The Census figures are damning enough, but already this snapshot taken every five years is hopelessly out of date.

The Census (2021) revealed that on any given night, 122,494 people in Australia are experiencing homelessness. One in seven are children under 12 and 23% of people experiencing homelessness are aged between 12 and 24. Homelessness Australia has a more pessimistic (or realistic) picture, but it too is dated. In 2021-22, 272,700 people were supported by homelessness services (source Institute of Australian Health and Welfare). In 2021-22, a further 105,000 people (300 per day) sought help but were unable to assisted because of shortages of staff, or accommodation or other services.

https://homelessnessaustralia.org.au/wp-content/uploads/2023/07/Homelessness-fact-sheet-2023-1.pdf

What’s been done about this? Not much and even if it could be described as ‘better than the last guys’, governments are playing catch up. The stories that make headlines are homeless camps (under bridges and freeway ramps) being broken up by officialdom.

McCrindle Research reports that the average full-time annual earnings in Australia is $97,510 with household gross annual income at $121,108.

The majority of rental accommodation is expensive and in demand. House prices keep rising and interest rates are higher now than when mortgages were negotiated when rates were low. In November, 552,000 people were listed as unemployed. And don’t get me started on the plight of single pensioners who don’t own their own home.

Victorian Councillors surveyed about ‘perceptions of corruption’

In May the Independent Broad-Based Anti-Corruption Commission (IBAC) emailed all 632 Victorian local government Councillors. They were invited to participate in a perceptions of corruption survey. Reminder notices were sent over a three-week period to those who had not completed the survey. In total, 131 Councillors participated in the survey, representing a response rate of 21%. (Councils where Administrators were in place were excluded).

Almost 75% of respondents thought corruption was a problem in Victoria; 59% thought it was a problem among elected officials. Three-quarters agreed that some elected officials behaved inappropriately or unethically, but this did not necessarily extend to corrupt behaviour.

(Victorian MPs were also asked to complete the survey with similar findings and level of engagement).

Readers should be aware that this issue is not just about Victoria and Councils should expect scrutiny in an election year.

What good is the UN?

According to a databank maintained by Sweden’s Uppsala University, there have been 285 armed conflicts since the end of World War II. That doesn’t include the latest war between Israel and Gaza and who is to say there won’t be more before 2024 is out? The United Nations, previously the League of Nations, is supposed to keep the peace. The UN’s latest moves to stop the war between Palestine and Israel have so far been futile. There was a vote for a ceasefire, but it wasn’t a binding resolution. Both sides have since kept exchanging missile fire as the occupying force advanced. A United Nations Security Council bid to enforce a ceasefire was watered down to allow aid to get through to Gaza. Meanwhile, Houthi Rebels from Yemen (reportedly backed by Iran), have stepped up attacks on commercial shipping vessels travelling through the Red Sea. This too is a response to Israel’s bombardment of Gaza.

Yes, I mean no

Sydney Mayor Clover Moore was on ABC television yesterday claiming that 70% of Sydney people voted Yes in the October referendum (remember that?). I don’t remember the context but found this statistic in direct contrast to the Federal seats of Maranoa (where we live) and Fisher) where we used to live. In both these electorates the Yes vote was less than 20% and the No vote actively supported and sanctioned by sitting Federal members. Incidentally, Clover Moore defends the $6 million+ cost of Sydney setting off 50,000 fireworks at midnight as great international PR. This comes under the ‘I’m just going to leave this here’ category of social comment.

I could go on (the quality of on-line captions for the hearing-impaired, editors who organise lists into alphabetical order, hypocritical betting ads, the deterioration of ABC News (sliding rapidly into viewer-provided content and infotainment), venues that expect musicians to play for ‘exposure’, the worrying swing to the populist form of government (in Holland, Brazil and New Zealand…)

Most of all, we wish you all a Trump-free world in 2024.

Who the Hell Approved That?

“I used to like the city better, thirty forty years ago’ South Brisbane circa 1973, before the Cultural Centre, Expo 88 and proliferating apartments.

The Cheeseparer family from Victoria, fed up with the overpopulated rat race, spent the school holidays cruising the south east Queensland coast, looking for a more ambient place to live than the far-flung commuter suburbs of greater Melbourne.

Margolia and Basil Jnr are sick of Melbourne’s unpredictable weather, the traffic, the pollution, the high cost of living and the four-hour daily commutes (including dropping the kids off at school and picking them up from daycare). They also want to be closer to the Cheeseparer oldies, Basil and Sybil (previously cited in this forum), who have retired to a 77^th floor apartment on the Gold Coast (which has a spacious guest room with four bunks and a sofa bed in the lounge).

So they set off on a road trip, boring the four Cheeseparer kids witless with their obsessive pursuit of a green change.

Somewhere between the Sunshine Coast and Brisbane, Dylan, 11, and a bit of a smartarse, looked out the window at a new estate. He provided the family with a pithy description: “a sea of roofs with nary a tree to be seen, tucked not so discreetly behind an acoustic fence running along the motorway”.

“Who the hell approved that?” he added.

“You can’t say hell – it’s a bad word,” said April, 6.

Margolia said: “Lots of religious people believe there is a place called Hell, so it is a place name, not a curse.

“But I was using it as a curse,” said Dylan.

“I know, let’s play a game”, Dylan continued. “First one to say something clever and cynical about any new housing estates we see gets a point. Winner gets more Face Time”.

“This is dumb,” came the voice of Max Cheeseparer, 15, banished to the Prado’s luggage compartment with Edie the Golden Retriever for saying negative things like “this is dumb”.

“Good tsunami will see that lot out,” muttered Eric, 13, not only bored but observant, as the Cheeseparer’s Prado cruised past a new coastal estate separated from the highway by a levy.

“Paper bag”, Dylan retorted.

“Yep, looks like someone drained a Teatree swamp,” said Basil Jnr.

“Not fair,” said April. “Adults cannot play.”

Well actually, adults should be playing this game when house hunting in the sprawling conurbation between Noosa and Coolangatta which makes up the greater metropolis of Bris Vegas. In the proliferating new estates, so often set next to freeways, generic housing design prevails, each home dominated by a two car garage and sited on allotments as small as 400sqm , depending which local government is setting the rules. The theory behind smaller lots is that it makes housing more affordable.

Who the Hell Approved That allocates points for the inventiveness of commentary, e.g. “Nice green buffer, mate” when clearly the trees have gone to Japan to make paper. A bonus point is awarded to the first to invoke The Castle’s famous quote: “Tell them they’re dreaming”. The latter usually applies upon seeing billboards announcing “house and land packages from $659,000”.

Be assured this is a game you can play anywhere in Australia and not just in the big cities of Melbourne, Sydney and Brisbane. One of the things you notice when following the grey nomad trail is just how few country towns have been left untouched by the cookie cutter form of new housing development built on the outskirts Many of these houses are sold off the plan with rental guarantees; bought by out-of-town investors. In the mania of the moment, no-one looks ahead 24 months and wonders “now what?”

There is a vast difference in vision between those steeped in the concept of sustainability and protecting the environment and the State government’s mantra ‘Jobs and Growth’.

The 2017 SEQ Plan forecasts an additional two million people by 2025 (bringing the region’s population to 5.5 million). Queensland’s target annual population growth (fertility+interstate migration), hoped for 3% per annum.

The State still boasts an average 2.2% over 10 years, although in recent years the population growth numbers have fallen below 2%. Perhaps the interstate migrants, in their desire to flee the rate race, have realised it is just as ratty across the border.

Residential real estate analyst Michael Matusik commented on figures released by the government which estimate that the Gold Coast, Ipswich and Logan are expected to accommodate 73% of the new housing development across south east Queensland. The Sunshine Coast and Brisbane City Council areas are forecast to hold an additional 10% each. The three municipalities are expected to generate an additional 298,000 dwellings.

Matusik noted that 82% of the new housing on the Gold Coast and 57% in Ipswich will be higher density (apartments), which is ‘‘much higher than current market demand’’.

The growth mantra has spoiled the character and amenity of countless suburbs in Brisbane. I lived there for 17 years, leaving for a smaller town in 2005 with no desire to return. I certainly have no capacity to buy there again, with a median price of $680,000.

The rot started with local governments deciding to relax planning rules so people with a house on a quarter acre allotment (once common), could sub-divide the block and put a second house on it (with an easement for access). This approach has degenerated into what is generically called ‘infill’, which in some inner city Brisbane suburbs mean allotments as small as 300sqm. These tiny house allotments are sought after, given that they represent a foothold in an otherwise unaffordable location (anywhere you have ‘city glimpses’).

In the 2017 report, Shaping SEQ, Deputy Premier Jackie Trad enshrines the vision that requires a population growth target.

“It is not difficult to see why the population of South East Queensland is expected to grow by almost 2 million people over the next 25 years. We have an enviable lifestyle, great schools and universities, and a strong, diverse economy expected to create almost one million jobs over the next 25 years. Our future is bright”.

This is not the only reason we moved to a country town two hours’ drive from Brisbane, but it was one of the motivators.

A reader who had been following our downsizing exercise with great interest wrote to relate her own experience in growth-mad Brisbane. Her aim was to sell the big family home in an outlying suburb and move closer to the city. But now she is spooked by falling sales volumes.

My friend also observes that prices are ‘predatory’ for inner Brisbane, with buyers made to feel ashamed if they are not up for the $750k starting point. So this empty nester, realising how little housing is designed for the over-50s downsizer market, has withdrawn from what she suspects is a static market, waiting for something to happen.

Meanwhile, the tree-changers are continuing the elusive search for a small town that has the infrastructure, ambience, affordability and the potential to commute to jobs in the city as needed. In theory, the brave new world of tele-commuting should make this lifestyle viable for people whose work revolves around consulting, writing, giving people advice and preparing documents.

A housing policy designed to facilitate and enhance this increasing desire to escape the rat race could in turn re-populate and rejuvenate small towns which might otherwise die. How about it, Anna?

Housing affordability and the empty homes scandal

housing-affordability-empty-houses — Housing affordability in world capitals. Photo of Melbourne’s Southbank by Ashley Rambukwella flickr CC https://flic.kr/p/KfdUMR

The inspiration to start writing (again) about housing affordability came from left field. I was sitting back enjoying an American roots band, The Brothers Comatose, at the Blue Mountains Music Festival in Katoomba. Lead singer and front man Ben Morrison introduced the band, saying they were from San Francisco but maybe not for long. “The price of houses is crazy there (man) and most of the musicians I know are moving out because they can’t afford to live in the area.”

“Maybe we could move here,” he suggested, and the audience groaned, knowing that housing affordability is just as big a problem in Sydney and surrounds as in San Francisco, Vancouver, New York or Paris.

“Can we sleep on your couch?’’ he jested, before doing what musicians do to avoid thinking about the cost of living. Great band, by the way (check out this bluegrass old-style tune around one microphone).

Morrison’s complaint rang true – I did a modicum of housing affordability research which quickly showed that the median price of a house in San Francisco’s Bay area clipped $US1.5 million in the fourth quarter of 2017. The California Association of Realtors Housing Affordability Index shows that it would cost $US7, 580 a month to service the mortgage. The average monthly rent for a two-bedroom apartment is $US3, 441.

Housing affordability is a myth in Vancouver, Canada’s biggest West coast city. The 14^th annual Demographia affordability study ranked Vancouver the least affordable among 50 American and Canadian cities. Internationally, it is ranked the third least affordable city among 293 locations around the world (Sydney was 2^nd). The British Columbia Provincial Government has made several attempts to rein in the city’s galloping real estate prices, including a 15% tax on foreign nationals purchasing metropolitan real estate. Another new measure attempts to tackle a problem that plagues Sydney and Melbourne, Australia’s housing affordability problem cities.

The BC government conducted a survey which found that 8,481 houses in Vancouver were unoccupied during a six-month period. That’s 4.6% of the housing stock. Now the government is going to levy a tax on people who own houses and don’t occupy or rent them. The tax will be calculated at 1% of the assessed value. So the owner of a two-bedroom condo in Vancouver valued at $900,000 and deemed to be unoccupied will pay the BC government $9,000 a year.

Meanwhile, the housing boom in Vancouver is on the downturn, according to the Vancouver Courier, and they should know. Still, with a median house price around $3 million (Dec 2017) and condos going at $1 million apiece, it’s maybe time for that bubble to lose some air.

Meanwhile Down Under, house prices keep rising

Melbourne and Sydney made into Demographia’s top 10 list of the least affordable cities in the world. Sydney’s median house price of $1.11 million assured it of that invidious claim. Demographia ranks middle income affordability using a price-to-income ratio. Anything over 3 is rated unaffordable. On this basis, some of the world’s most affordable towns included Youngston, Ohio (1.9), Moncton, New Brunswick (2.1) and Limerick, Ireland (2.2). There are no affordable Australian cities on Demographia’s watch.

The least affordable city is Hong Kong (19.4) then a gap to Sydney (12.9) and Vancouver (12.6). Melbourne (9.9) is slightly more unaffordable than the aforementioned San Francisco (9.1).

Studies have shown that Melbourne is one of the big culprits in hiding empty houses among its residential property stock.

Australia’s 2016 Census showed that 11.2% of Australia’s housing stock was described as unoccupied on Census night. Empty property numbers were up 19% in Melbourne and 15% in Sydney compared with the 2011 Census. This growing anomaly is a global trend in the world’s biggest cities which have allowed rapid apartment developments.

Just why 1.089 million houses and units were unoccupied on Census night is hard to explain. But it probably suggests the owner/s were not in need of rental income and would rather keep the place in mothballs for use when the wealthy owners or friends and relatives visit (for the Australian Open, Melbourne Cup or the Grand Prix) or are relying on capital gain without the need to bother with tenants.

Hal Pawson of the University of NSW wrote in The Conversation that the spectre of unlit apartments in Melbourne’s night sky prompted the Victorian government to introduce an empty homes tax. Like Vancouver, this is levied at 1% of the property’s value. Similar taxes have been introduced in Paris and Ontario. Mr Pawson, Associate Director – City Futures – Urban Policy and Strategy, City Futures Research Centre, Housing Policy and Practice, UNSW, (try getting an acronym out of that. Ed.) says the Melbourne tax only applies to inner city and middle suburbs and, there are ‘curious’ exemptions for foreign nationals with under-used second homes.

The flaw in the scheme is that it relies on self-reporting. Pawson says the lack of reliable data on empty homes is a major problem in Australia.

Census figures substantially overstate the true number of long-term vacant habitable properties because they include temporarily empty dwellings (including second homes).

Prosper Australia uses Victorian water records to estimate that about half of Melbourne’s census-recorded vacant properties are long-term “speculative vacancies”. That’s 82,000 homes. A similar “conversion factor” to Sydney’s census numbers would indicate around 68,000 speculative vacancies.

Labor Opposition shadow Treasurer Chris Bowen has proposed a national tax on homes left empty for six months or more.

Pawson says these “cruel and immoral revelations” come at a time when 400 people sleep rough in Sydney every night and hundreds of thousands more face overcrowded homes or unaffordable rents.

He says Australia has a bigger problem in terms of under-utilised occupied housing. Australian Bureau of Statistics survey data shows that, across Australia, more than a million homes (mainly owner-occupied) have three or more spare (read unused) bedrooms. A comparison of the latest statistics (for 2013-14) with those for 2007-2008 suggests this body of “grossly under-utilised” properties grew by more than 250,000 in the last six years.

While authorities are grappling with the issue and how to perhaps tighten foreign ownership laws, the ANZ Bank did its own survey. Foreign buyers were playing an increasing role in spurring demand for new houses and apartments, it found. The ANZ analysed Reserve Bank data to conclude that in 2015-2016, foreign investors bought between 30,000 and 60,000 dwellings in Australia. This equates to 15% to 25% of all new dwellings, 80% of which were apartments, which can be bought ‘off-the-plan’.

There is good reason to suspect that the new apartment markets in Hong Kong, Vancouver, London, Paris and other desirable world capitals are underwritten to some extent by foreign nationals (including Australians).

The problem which could arise, say in the case of a global recession, is what happens in cities like Melbourne and Brisbane where foreign investors have bought up to 35% of new stock, if these owners are forced to sell.

Not to worry, most big box discount stores will give you a large cardboard box in which to live. The dumpster bins behind shopping centres have perfectly good food that’s just been chucked out because it has passed the use-by date.

Trust me.

FOMM back pages

Travel safe this weekend, people

Housing bubbles here and abroad

(New housing in Pokeno, 57 kms south of Auckland city. Risky motorway photo taken by Bob, who will go to any length for FOMM readers!)

Kiwis and Aussies aged 45 and over share one obsessive thought at this moment in time: how will our kids ever be able to afford their own home? Unless the housing bubble bursts, they probably never will be able to, even when the Boomers die off and leave their kids a residual estate.

The housing market both here and in Aotearoa has got away from humble wage earners. On my all-too quick visit to the old country, Auckland’s steaming hot housing market was all anyone could talk about. After a January dip in median prices (a reaction to new tax laws introduced in late 2015), the March figures revealed a $100k hike in the median price to $820,000.

Stories abound of people who bought a cottage in a then-dowdy Auckland suburb for $100k or less in the 1980s and sold last week for $1 million. The New Zealand Herald’s front page on April 13 proclaimed “Here we go again” to head a story about Auckland’s median house price. The story continued on page 3 where Labour Housing spokesman Phil Twyford said the $70k increase in the median price in just one month was almost one and a half times the median income in Auckland.

Not surprisingly, investors accounted for 44% of the 3000+ sales used to determine this alarming figure. This is similar to the Australian trend, where for the past two years just over 50% of housing loans have been made to investors.

Buyers with cash and/or equity are surging into the Auckland housing market and many pundits feel it is inevitable that it will join Sydney in having a $1 million median house price.

Everyone I spoke to told me that Auckland/New Zealand has the highest income to mortgage ratio in the world. The crusty old journo in me demanded that this be verified. The International Monetary Fund, which keeps track of housing costs vs income, indeed placed New Zealand 1^st, ahead of Germany, Estonia and Austria. In sixth place came the UK and in 9^th place Australia.

The ratio compares housing valuations to average income, the higher rankings showing that house prices have risen much faster than income. (Conversely, if you can score a job in Spain, where unemployment is still running at 22%, you can buy a cheap apartment and go running with the bulls in Pamplona).

If you were wondering how this is relevant, Spain’s economy went pear-shaped after their real estate market tanked in 2008. Caveat emptor!

The problem when housing markets get hot is the price rises are not matched by the prospective buyers’ incomes. In 2015, the median house price in Auckland increased $83,000, against a median income of $46,800. The data for this NZ Herald story, headed “Does your house earn more than you do?” was sourced from NZ Work and Income and the New Zealand Real Estate Institute.

In Sydney’s over-heated market, house prices are up to 12 times median income, according to a Sydney Morning Herald report in November. In mid-2015, the median Sydney house price was a headline $1,004,767, against a median household income of $85,067.

Meanwhile in Aotearoa, those determined to get their toe on the first rung of the housing ladder are fleeing south, as far as Huntly (a former mining town 97.2 km from the big smoke on State Highway 1), and north to Wellsford 77.3kms away. The plan is to buy, commute, save and over time upgrade closer to Auckland.

Pokeno, once a small Waikato hamlet just outside Auckland city limits, is now a forest of houses, if not nestling, then sprawling over the once green rolling hills. New housing is evident on both sides of the four-lane motorway which now extends to Hamilton and beyond. I had a trawl through real estate.com and was unable to find much new in Pokeno under $600k. So the early birds have already got their worms and now it is just another suburb of Auckland, a 57 km commute to the city.

Others have absconded to small towns like Te Aroha, Wairoa and Dannevirke, where a decent house and block of land (known as a ‘sixtion’) can be had for less than $150k.

New Zealand has few barriers in the way of investors – until recently there was no capital gains tax (as such) and no inheritance tax. Prime Minister John Keys introduced new measures in last year’s Budget, one of which was a tax payable if the (investment) property was sold within two years of purchase. Keys refused to call this a capital gains tax, saying New Zealand already had one, but the government has to prove “intent” to make a profit.

New Zealand also tightened its foreign investment rules and now requires all foreign buyers to declare a tax identification number from their home country. Kiwis don’t call it negative gearing, but as in Australia, expenses relating to investment housing (depreciation, interest, maintenance etc) can be offset against rental income.

Those who support a continuation of negative gearing in Australia claim that if it was abolished the property market would collapse. The Real Estate Institute of Queensland (REIQ) said 79% of its members and landlord clients believed that investors would abandon the strategy if Labor’s negative gearing changes were brought in. (Labor proposes to restrict negative gearing to new homes and ‘grandfather’ or exempt existing investment houses.)

REIQ Chairman Rob Honeycombe said the findings confirmed that changes to negative gearing would be disastrous for the Queensland property market.

“That will have a crippling effect on house values and on the rental market, where the private rental market plays such a critical role in keeping rents affordable,” he said.Prime Minister Malcolm Turnbull, no doubt sensing the pre-election atmosphere, has declared he will make no changes to negative gearing in next week’s Budget. The estimated 1.5 million people who invest in residential property would be sure to vote for the politician with the least disagreeable tax policy.

Meanwhile, the 25-44 age group, once the heart of the first home buyer cohort, is struggling to save for a deposit, faced by high rents and stiff competition for affordable housing. Assuming they could find a house in Sydney or Auckland for $700,000, it still means they have to save $140,000 for a deposit (about 14 years at $200 a week).

Their plight creates a dilemma for well-intentioned property investors, those who have simply decided that bricks and mortar is the best form of investment. Sure, they get the tax breaks, but they also have to take the investment risk in the first place and then the secondary risk that they might get the tenants from hell. The third risk may be a Pamplona-type charge for the exits if Labor gets up and changes the rules.

Part of the solution lies with the 814,000 Australians (2011 estimate), who have paid off their mortgages. Whatever their circumstances, they are the only people who, either by gifting money or using their equity for a loan, can help their adult children buy a house. Waiting for the bubble to burst is another option. Or you could move to Spain…there are apartments in Pamplona priced from 39,000 euros (about $A58,000). Buena suerte con eso

(Thanks to Laurel (She Who Also Sometimes Writes) for being a splendid substitute when I was abroad )