Crying all the way to the bank: renters, home buyers reach their Lowest point

Martin Lauritsen writes: As a low-income earner with a mortgage and a small family, I’ve had to dip into my savings to stay afloat in the current economic climate. Bernard Keane’s article, “The cost of the Reserve Bank’s profit denialism will be counted in lives”, paints the picture of Philip Lowe as a zealot of neoliberal ideology, incapable of thinking outside his own biases while punishing a growing number of people who can least afford the unjustified cost-of-living increases. I couldn’t agree more, and the pressure that such ideology puts on so many like myself, my family and many of my close friends is reaching an unbearable tipping point.

Being a musician and instrument maker has been a death by a thousand cuts since the COVID pandemic. I have no optimism left in any government or government institution.

Chato Page writes: The RBA governor has new clothes! The RBA governor has no clothes! Australia paints itself as the land of the fair go but it actually suffers from entrenched ideology on both sides of politics, and they are both funded by the big end of town.

How in that mess can the people ever receive a fair go?

John Peel writes: Laugh-a-minute Lowe. Fortunately this arrogant prig will shortly be retiring to a life where he can work much shorter working hours while spending much more.

Peter Mair writes: Lowe has given an outstanding display of courage under fire — standing his ground when all but he had fled. He is doing what has to be done, gently saying what needs to be said. After years of questionable monetary policy globally — dictated by the US and Europe — the reckoning has been fast and furious and unfairly uncomfortable for the most vulnerable.

The policy response locally — similarly dictated — is comparable with that around the world. If the burden of adjustment is to be shared more evenly, it is ever more appropriate for the RBA to be able to speak up on a broad front, to shape the shared pursuit of “the economic prosperity and welfare of the people of Australia”.

Edward Down writes: Profit-driven inflation is as plain as the nose on the face of annual company reports. Have a look at the profit. If a company’s profit has increased substantially more than the volume of its output, then it has been price gouging, contributing to inflation. If that extra profit was to be removed through a vicious windfall tax, voila! The incentive for companies to contribute to inflation through price gouging will disappear. 

Only fair when you think about it. Companies should also share the pain of bringing inflation under control. 

John Sneddon writes: A brief review of the role of banks in one aspect of inflation should surely look at what appears to be an increase in the margin between borrowing costs and deposit interest rates. My observation is that banks have simply increased this differential, depositors have been dudded and borrowers have been gouged. This must be called out. 

Jake Hennessey writes: Don’t forget, the trillion-dollar government debt is only one side of the ledger. A quarter of property sales post-COVID were cash sales. Witness waterfront mansion after waterfront mansion razed and risen again ever more impressive — the level of excess obscene. The spending of the “war chest” continues, unabated and unaffected by raising interest rates. This is not going to end well.

Working for the man

Lyn Payne writes: Someone on more than $900,000 a year telling the poor how to survive (“It’s Lowe’s reality show, we just live in it. Or try to”)! My son took a second job (weekends) some time ago to pay the mortgage. The family was renting last year. He tells me he’s glad they are not dependent on a landlord.

PS: the small weatherboard unrenovated, two-bedroom cottage next door will be vacated at the weekend. Boards are falling off, there is mould inside. Rental price? $550 a week.

Ray Schriever writes: I think Philip Lowe is just being underestimated. His worldly advice on house sharing and getting another job (or one that pays better) is really a gem.

I grew up in a multigenerational family home, regardless of having been built as a two-bedroom house with a veranda. We even managed to fit in my mum’s cousin. These days I live with my daughter, her husband and kids, my wife, another daughter, my cousin, and an unrelated woman. I quite like it. On the other hand, I was desperate to leave the house I grew up in and shared a house with two workmates.

But the thing is, I don’t think Lowe is trying hard enough — or perhaps he isn’t revealing the whole neoliberal dream. By that standard why not build dormitory compounds? Perhaps in or adjacent to workplaces. I toured parts of China in the ’90s and the urban drift had created a large housing crisis which was simply addressed by small rooms, bunk beds, communal eating, low pay and no privacy. Of course the managers and chaps like Lowe didn’t live there. 

Lowe’s solution is part of a neoliberal view that the lower classes really should know their place. Once we have people firmly ensconced in this environment we can divide them up by gender (to reduce breeding) and re-educate their children en masse. Lowe’s kids/grandkids will get jobs as administrators etc after graduating from private boarding schools where they have received a different education.

Alison Dalwood writes: I lived in a one-bedroom apartment in Edinburgh in a flat built as an 1825 family home which was converted to smaller dwellings in the 1890s. On my floor there was a one-bed flat, a two-bed flat and a bedsit. It was fabulous for my needs. 

This was also done to Queenslanders during the 19th century as needs changed. Verandas were built as bedrooms for boarders, large homes were converted to boarding houses, people and families downsized. It’s not a new phenomenon. We can adjust again if circumstances or generosity force us to consider sharing our accommodation.

Rex Bevan writes: Is it just possible that the principal mechanism used by the RBA to fight inflation — its arbitrary setting of the official cash rate to manipulate mortgage interest rates — is actually the largest single factor in causing domestically generated inflation by pushing up rents?

In the US the mortgage rate structure is driven by the 20-year government bond rate which has been quite stable since 2020 even as short-term rates rose sharply. Rents through this period increased only slightly. In Australia both mortgage interest rates and rental rates have risen sharply as the RBA official cash rate has gone from .25% pa to 4.1% pa.

The RBA’s inflation-fighting efforts would be better directed at managing the money supply and simply allowing interest rates to find their own level. The basis of my argument is that underlying inflation follows the movement in monetary supply vis-a-vis GDP in both directions.

Living the dream

Tim Stephens writes: I can’t accept Benjamin Clark’s comment “onwards is upwards” (“Australia needs to drop its big block bias and embrace apartment living”). I am a country boy and lived out of town on a farm. For me to move into one of these proposed boxes would have meant jumping from the top of it eventually. As a short-term fix the living-in-a-box idea may get some people housed close to work and facilities. But what about quality of life?

Long term we need quality housing with built-in lifestyle. The problem I see now is young people/families wanting to build/buy two-storey, five/six-bedroom, four-bathroom McMansions. What happened to the old idea back in the ’50s of two/three-bedroom fibro (well, fibrous cement these days) homes? These are cheap to build, quick to put up, and a lot of the 1950s ones are still standing.

Andrew Dunn writes: Clark is absolutely right about flats/units/apartments, but it’s not just the size of the property that’s lacking, it’s the woeful building standards and lack of quality they’ve been erected under.

We are baby boomer downsizers and visited numerous high-density residential blocks with a view to going up not out. We found not one that had any form of noise abatement in the build. No sound blankets, no double glazing or comfort-tone glass, no heavy-duty gyprock, no wall insulation… and the list goes on. These are basic requirements to make these properties liveable.

There is little surprise that these modern traffic-oriented developments are populated with renters as opposed to owner-occupiers. Developers simply build to current standards that in general haven’t changed since every residential build was a standalone three-bed, one-bath, no-garage house.

My final whinge about current up-not-out builds is the woefully inadequate onsite parking. Again, the developers simply state that they have complied with the current standards — which are simply inadequate at best and negligent generally.

Katharine Jordan writes: To support the move into multi-density living, we also need a robust discussion on the default view of one car per person, requiring multi-car garages and impossible street parking. Investment in infrastructure to support safe and convenient alternative transport including walking, cycling, public transport and carpooling is essential. Active transport is much better for our physical and mental health, and our environment. Bring it on!

Meera Finnigan writes: For the first time in my life, I live in an apartment and I’m happy here. I’m 74. It makes a lot of sense to downsize in older age to free up space in houses for families.