The great Australian dream of home ownership is quickly becoming an illusory nightmare in which the buyer’s entire purpose and mission in life is being directed to ensuring and maintaining the profits of developers, banks and also the health of government coffers. The main problem is affordability, which, in the case of developers is controlled largely by them. The pricing of projects is geared largely to what the market is silly enough to bear rather than a cost plus formula. In the pursuit of profit optimization projects include a growing number of postage stamp sized blocks, some with frontages of 10 meters or less where a garage door becomes the most prominent architectural feature. To add insult to injury, a misguided desire on the part of developers for uniformity in architectural styling ultimately produces a so called “up market” estate in which everything looks the same ultimately producing streets-capes that lack interest because of a lack of design diversity which will potentially impact capital growth as today’s master planned communities become tomorrows upmarket slums. It used to be that a person could buy a block of land and build whatever they liked largely because of the fact that they owned the property, but with today’s common and extreme application of protective covenants and developer controls and guidelines things look more like a license to use the property as opposed to outright ownership. There are cases where developers have issued fines for tidiness violations and don’t get me going on ongoing body corporate fees to pay for community facilities that form the vision of the developer.
The big issue remains however affordability, and its not all the fault of developers, recently a building industry body estimated in a report that approximately 30% of the cost of a new house/land package goes in government imposts of one sort or another spread over the three tiers of government. The banks, who derive most of their profits from mortgage interest are the most vulnerable in any property downturn as we have already witnessed with the sub prime lending saga and the resultant G.F.C. and as such have a huge interest in the real estate roller coaster continuing to show growth and one would thus assume as a result, welcome the influx of overseas buyers to help prop the industry up, a situation in which government are happy to lend their co-operation. To a very large degree, and in a curious exception of popular free market ideology, the government, ironically at taxpayers expense, continues to interfere artificially in the property market by providing grants to first home buyers which actually works over time to defeat the first home buyer’s interests as prices rise with the increased demand, delivering a situation which effectively amounts to a transference of public taxpayer funds into the hands of private interests, the builders and developers, the banks, the governments and the financial sector along with various other parasites including the plethora of wealth and investment advisers that spring up every second week and continue to mercilessly screw their clients in the form of almost obscene commission levels that clients are completely unaware of. Everyone wants to see a healthy economy and no doubt the country as a whole benefits from this but in the current system its always a case of the little guy being screwed over by the big guy, a form of economic enslavement to bigger interests will hold sway unless action is taken.
The solution is rather simple, stop buying property! Of course this idea isn’t going anywhere any time soon, however affordability could potentially return if purchasers realize the ultimate power they possess as buyers in the negotiation process and join forces to form a buyer’s group. At the moment the buyer’s relative bargaining position is weakened by the fact that all buyers are acting in isolation whereas the power of being in a buying group with a large membership could potentially restore the balance in favour of the buyers, who are the group that ultimately creates everything, yet taken for granted and dictated to by the powers that be. I invite you, even if you do not use our particular services to register and be a part of an organized group to monitor and share information in restoring the buyer’s bargaining position to a healthier balance and help make our children’s and our grand children’s futures a little brighter. Please go to the contact area in the main menu and register for further updates.