Home buyers unmoved by budget
Stapleton, John. The Australian; Canberra, A.C.T. [Canberra, A.C.T] 19 May 2008: 2.
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Abstract
"We are making it very hard for anyone to get a start," he said. "The auction results show clearly we have got it wrong."
Computer programmer Tony Haryanto, 33, bought a unit with his wife Kartimi, in the inner-southern suburb of Rosebery in Sydney late last year. Even though they are both working and have a combined income of about $120,000, they are struggling. The unit cost about $400,000 and their repayments are about $2500 a month for the interest only.
"We don't live a luxurious lifestyle," he said. "We are on a tight budget. I always bring my lunch from home. I never have coffee at a cafe. We do our shopping at Kmart. We look for cheaper clothes. If our boy gets sick for a week then we lose my wife's income, which makes it almost impossible."
THE federal budget has failed to restore confidence to the nation's property markets with most capital cities recording weekend auction sales of less than half compared to last year.
The poor results come after the Rudd Government unveiled its $2.2billion housing affordability package, which included government contributions to first home saver accounts, incentives for low-rent housing and funds to provide new housing infrastructure and cut red tape for development approvals.
Treasurer Wayne Swan last week declared that a family needed an income of $120,000 even to buy a median-priced house in Sydney and cited this figure as the basis for the income cut-off point of $150,000 for several welfare benefits.
In Australia's most expensive city, only $88million worth of property changed hands in contrast to $173million for the same weekend last year. The Sydney clearance rate was 49.2 per cent compared to 61.6 per cent last year.
In Adelaide only $7.9million in property sold with a clearance rate of 62.5 per cent, compared to $17.4million and a clearance rate of 87.8 per cent for the same time last year.
In Brisbane only 13 houses sold at auction for a value of $8.2 million, compared to 28 houses for $16.2million last year. Clearance rates were a mere 31.7 per cent.
Melbourne, benefiting from a population boom, was the only city to hold up against the slide. Clearance rates of 63 per cent were high in contrast to other cities, but down from last year's 89 per cent.
Kevin Lee, a financial consultant with mortgage broker Smartline, said the clearance rates were a vivid economic indicator that theGovernment had no idea what was happening in the property market.
"We are making it very hard for anyone to get a start," he said. "The auction results show clearly we have got it wrong."
Computer programmer Tony Haryanto, 33, bought a unit with his wife Kartimi, in the inner-southern suburb of Rosebery in Sydney late last year. Even though they are both working and have a combined income of about $120,000, they are struggling. The unit cost about $400,000 and their repayments are about $2500 a month for the interest only.
"We don't live a luxurious lifestyle," he said. "We are on a tight budget. I always bring my lunch from home. I never have coffee at a cafe. We do our shopping at Kmart. We look for cheaper clothes. If our boy gets sick for a week then we lose my wife's income, which makes it almost impossible."
Senior economist with the Housing Industry Association Harley Dale said no family earning $120,000 could save a substantial home deposit given the high cost of Sydney rents.
GOING SLOW
Weekend auction results of capital cities
Sydney ............. Saturday ... Corresponding Saturday last year
Total listed ........ 266 ........... 386
Clearance rate ... 49.2% ....... 61.6%
Brisbane
Total listed ........ 57 ............. 54
Clearance rate ... 31.7% ....... 53.8%
Adelaide
Total listed ........ 41 ............. 49
Clearance rate ... 62.5% ....... 87.8%
Melbourne
Total listed ........ 524 ........... 581
Clearance rate ... 63% .......... 89%
Source: homepriceguide.com.au; REIV
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