Monday 28 November 2022

Buying a first home

is apparently "getting further out of reach" for many.

I suspect it has always been out of reach for some and that for many others it is something they thought they would never achieve. In this morning's paper there is a suggestion which will put it even further out of reach.  There are people in the building industry who say the tax on foreign domiciled landlords should be scrapped.

I disagree. If you live in another country it is likely there is a housing shortage there too. Build something there and rent it out. I don't know of any country where that would not be possible. If you have that sort of money you can grease palms anywhere. Okay, your investment might not be quite as secure but...

My parents were forced to rent for many years. Renting went with the head teacher's job if you were teaching in rural areas. You rented housing from something called the PBD - "Public Buildings Department". For the most part the houses were made from fibro-asbestos sheeting with corrugated iron roofing. They were functional but that was it. Other, young and usually single, teachers had to make do with living with a farmer's family or in a caravan. The situation was often less than ideal. They were paying rent and board while their more fortunate city based colleagues were buying their own homes.  Even now I can look around and see the economic advantage the city dwellers had in home ownership. 

Middle Cat was self-employed and there was no superannuation scheme she could invest in so they did the next best thing and bought a second house. The idea was that the rent would pay off the loan and provide an income. At the time it was a very reasonable way to look at things, indeed what people were being advised to do. 

But governments have a way of changing things if they can see a way of getting more money. People are not investing in housing they way they once were and this has  added to the shortage.

And of course most of those who do want their own home want it with everything at the start. They still want a single unit dwelling on a "block". That area might no longer be a quarter acre as it once was but they want "space" even if they don't actually garden. Expensive? Yes.

Is is any wonder we have a housing shortage? Making it harder for foreign domiciled people to invest, allowing others to invest on the same terms as superannuation and encouraging others to do with less at first might help to reduce the problem too.  

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