A column about mortgages
After the last election, I was furious with homeowners. Furious because they’d bought John Howard’s cynical promise to keep interest rates low. That ploy won him the election even though interest rates are decided by the independent Reserve Bank, and respond more to global trends than any policy of the Federal Government. What an evil genius.
I was also furious that they didn’t go for Mark Latham’s desperate attempt to reassure homeowners – the Interest Rate Guarantee, where he signed a giant piece of paper committing him to keep “downward pressure” on rates. I’m not quite sure what would have happened if he had failed to do this – perhaps the electorate would have rapped him over the knuckles with an oversized ruler or something.
I was ropable with the swing voters in mortgage belt areas like Western Sydney, because I thought they’d voted incredibly selfishly. Rather than looking at the plight of those less fortunate than themselves, they were voting out of fear, just as they had in 2001. Only instead of fearing refugees and Al Qaeda – which they thought were the same thing – they feared the banks. (Fair enough, too; they’re pretty scary.) Young families, indebted to the hilt to buy their dream homes, were terrified by the prospect of having to find even an extra $20 a week. And I thought they voted incredibly selfishly.
But now I’m in the process of buying my first home (or more specifically, miniscule apartment) and that’s changed everything. Bugger principles, bugger education and welfare for those who desperately need it. I’m voting for whoever can keep my repayments from getting even more ridiculous.
Really, housing prices in Sydney are absurd. You can’t buy a closet within cooee of the city for less than about $300,000 these days. (I know, I’ve tried.) Sure, you can still get a big house cheaply if you’re prepared to compromise on location. But really – and I know I’m speaking to fellow inner-city geography snobs here – who wants to live in West Woop-Woop, where they don’t even know how to make a decent chai latte?
The problem is that it’s not like our salaries have kept up. Sydney housing prices have more than doubled in a decade, and salaries haven’t. It’s more expensive to buy in London or New York, of course, but the wages there are far higher than anywhere else in the UK or US, keeping in step. But Sydney salaries aren’t much higher. If you ever want to be really depressed, check out what it would cost you to own a place like the one you’re living in now in Melbourne. If only it didn’t mean living in Victoria.
We’ll have the last laugh, though. It’s painful now, but our houses will appreciate far more over our lifetimes. Sydney’s full of future property millionaires who are paying off their mortgage, but will be in great shape when they retire. I suggest we all use our fabulous future wealth to travel down to Melbourne and gloat.
I’ll tell you what else – there’s no way I’m trusting Kim Beazley with my mortgage. (Admittedly I didn’t trust him before I had one, either.) He’s from Perth, and they don’t know what it means to have a crippling mortgage. For the price of my one bedroom apartment, I could probably have bought most of the Perth CBD. But I’d rather have my Sydney closet, thanks.
Oh, and as for John Howard, cynical fearmonger? Thanks for the $7000 First Home Owners’ Grant, mate, you’re a legend. Can you put a white picket fence around an apartment?