Wednesday, July 15, 2009

UK and US markets should look to Australia

I realised today that I've been very Australian-centric with my blog posts on here (with the exception of my comments about Kirsty Alsopp the other week), so figured it was high time to look further afield and start reading some of the OS news sites again.

What I read got me thinking.... the UK and US property markets would have a lot to learn from the Australian property market, which is one thing still propping us Aussies up, downunder in the midst of the financial crisis.

The UK market is having problems driving demand, and yet I know from research that you generally can't borrow more than five times your annual salary over there, which makes first homes average out at around GBP135,000 - far lower than the average here in Australia, even though the pound might as well be worth the same as the dollar in terms of prices (3 dollars or 3 quid for a cup of coffee).

Perhaps, to protect the building sector, they could look at providing more public housing in a tight rental market, as the Rudd Government is doing here. And perhaps they could boost interest in the market, building the Australian Dream into the UK Dream, by offering a similar scheme to the First Home Owners Grant.

The US may not need to offer such incentives to step into the market, given that it is massively oversupplied... but it could look at our banking system and make it so that mortgagees can't just walk away from properties that have gone backwards in value, as they have until now (and will continue to do into the future if nothing changes). This would, by default, prop up the market in the US for the future by making the American Dream home a less disposable asset.

Here in Australia, you're not allowed to walk away from your mortgage, scot-free... If the bank can't make the money back off the property, they can still come after you for the rest. Here, you're less likely to simply walk away and not return because your money and future really is tied up in your home. You'll stand and fight, and make more effort to keep it, especially with the rental rates running so high.

I realise that it's not going to be a catch-all solution. You can't solve a problem overnight. But it is food for thought. Perhaps the world needs to look at the best of each country's financial and mortgage system and cherry-pick until we find something that works?

We could learn a bit from them too (it could be argued...). Their interest rates are FAR better than ours!

Like travellers broadening their horizons... let's all learn from each other's strengths and weaknesses.

Wednesday, July 8, 2009

Now THAT's affordable housing...

Oh wow. Had to post about this cool house in Melbourne. It only cost the young lass owning it $20K to build!

I don't know the land value, but that's got to be positive cashflow.

Sassy, smart girl! I'll leave you to read the article for more info.