Nathan Davies: If you don’t have inherited wealth flowing down, well … good luck with that

Homeless camps were something Australians used to see on news bulletins from America. We got used to seeing it here pretty quickly, writes Nathan Davies.

Twenty years ago I bought a house in Tasmania for around a hundred grand and some change.

It was a 120-year-old two-storey terrace home in the middle of Launceston with a big old open fireplace in the lounge room. Lovely.

At the time I was making around $30,000 a year in an entry-level journalism job.

That same house, according to real estate websites, would today fetch more than $700,000. The job I was doing at the time now pays around $50,000.

You don’t have to be Warren Buffett to see that a property increasing seven-fold in the time when wages haven’t even doubled is a huge problem should you be the type of person who, you know, likes to live in a house.

Right now, whether you’re looking to buy or looking to rent, you’re on a hiding to nothing.

The Apple Isle, where even battlers could buy their own homes just a decade or two ago, now has significant homelessness problem fuelled by skyrocketing house prices, interstate migration and a dearth of rentals driven in part by the growing trend towards short term B&B-style leases.

It got so bad before the pandemic that a tent city sprung up in Hobart’s showgrounds, housing hundreds of homeless Hobartians who couldn’t find a rental property.

In many ways Tassie was the canary in the coalmine, but back here on the mainland things aren’t much better these days.

Double-income middle class families are living in caravan parks, single mums are living in tents and hundreds of at-risk kids are scraping by thanks to the generosity of friends with a free couch.

The waiting list for public housing has blown out to years and homeless encampments, once only seen on news reports from America, are becoming increasingly common in Australian cities.

It’s incredible how quickly we’ve become used to seeing people sleeping on our footpaths and in our alleys and malls. What would have been shocking just a few years ago is now an accepted part of city life.

Even our regional towns and cities have been hit by the crisis.

Every government talks the talk, but few are really committed to walking the walk – which is understandable from a political point of view.

Try winning an election by promising that you’re going collapse the housing market and reduce the cost of homes by, say, fifty per cent.

A person makes his way out of his tent among a row of tents along a sidewalk in downtown Los Angeles. Picture: Frederic J. Brown/AFP

While homes are being treated as assets and investments by a big bloc of voters it’s a risky proposition indeed for any party to use policy in an attempt to reduce their prices.

So instead they throw money at the problem, money that is quickly absorbed by an overheated market.

Throw a $15k grant to prospective homeowners and watch houses suddenly increase by $15k overnight.

Aside from the serious social issues being driven by the price of, and lack of, homes in this country it’s worth also reflecting on the slow death of “the Australian dream”, that post-war promise that all Aussie families would have a safe, secure home of their own.

A concerning trend emerging in America has seen big tech corporations turn to housing as a safe place to park wealth, with big business buying up whole streets to rent back to families. Let’s hope that trend doesn’t gain too much traction in Australia.

I feel incredibly lucky to own – well almost own, the bank still has a chunk – my own home.

It’s my family’s haven, a place where everyone can feel comfortable and secure in a sometimes uncomfortable and insecure world.

I don’t have to worry that my landlord is about to hike the rent by 30 per cent or chuck a wobbly because my weirdo King Charles cavalier has scratched the bottom of every single door in the house.

We can have chickens and a free-range rabbit and let window sills get dusty without judgment. You know, living.

It was a house funded, in part, by the sale of that first little home down in Tassie and I regularly reflect on the fact that my generation, Generation X, may be the last generation for which home ownership is a reasonably achievable goal.

If you’re a young couple looking to get a first home in an Australian city right now and you don’t have a significant amount of inherited wealth flowing down from parents or grandparents well … good luck with that.

And if the deck wasn’t already stacked against you, rising interest rates are only going to make life harder.

Sure, we might see a “correction” in the housing market over the next year, but unless that “correction” is huge then it’s a pretty moot point. A five per cent discount on a $700,000 house doesn’t make a huge difference to a couple of kids on the average wage.

If the dream is home ownership is dying, and that seems a safe bet, then the safety and dignity of renters must become a priority as it is in other cities around the world where renting for life has long been the norm.

Because if we don’t do that, if we keep treating renters like second-class citizens who need to walk on eggshells for fear of being evicted from their own homes and thrown back into a hostile open market, then not only is the Aussie dream dead then it could well become an Aussie nightmare.

For many people struggling to find a safe place to live with their families it’s already there.