Plonk

Our outer suburbs are poverty traps

19 posts in this topic

http://www.heraldsun.com.au/news/victoria/our-outer-suburbs-are-poverty-traps/story-e6frf7kx-1225854963435

Includes this:

Our outer suburbs are poverty traps

  • Laurie Nowell, Mitchell Toy
  • From: Sunday Herald Sun
  • April 18, 2010 12:00AM

958448-miljkovic-family.jpg

The Miljkovic family: Dragan and Slavica with Monica, 4, and Lucas, 13 months, at their Caroline Springs home. Picture: Rob Leeson Source: Herald Sun

MELBOURNE is developing poverty-stricken ghettos in the outer suburbs and a growing rich-poor divide, a shock new Melbourne University study has found.

The MacroMelbourne report has also discovered that for the first time the new so-called "McMansion" suburbs in outer Melbourne are becoming poverty traps because of rising housing prices and interest rates and soaring travel costs.

The report identifies Greater Dandenong, Maribyrnong, Darebin, Brimbank and Moreland council areas as the most disadvantaged in the city.

And it finds Melton-Caroline Springs, Wyndham, Cardina-Casey, Hume and Whittlesea are the areas most in need of infrastructure investment.

The report, commissioned by the Melbourne Community Foundation, is a snapshot of poverty, social problems and disadvantage across the city.

And so it begins. This is the problem with building outlier suburbs- the demographic and the conditions of newbuild suburbs hasn't changed in some 30 years- poor infrastructure, transport, lower incomes. The new house can be temptig, but there's a reason for the relative affordability. As IR's rise, many will question if they should have remained renting or living at home with parents. From what I recall, it was always these kind of suburbs that got hit hard.

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Anotherarticle about the same area:

Study's 'ghetto' warning

http://www.heraldsun.com.au/news/victoria/studys-ghetto-warning/story-e6frf7kx-1225854961227

Great. The houses arer probably only a few years old, and here they are in danger of being a "ghetto". When the financial problems begin in earnest, then the social problems begin- arguments over money, parents absent due to having to work a few jobs to pay the mortgage, quick sell-offs of the houses as relationships break down. Neighbours lost to moving, and community break down. So mch for the leafy ads and promises by the developers. Not meaning to be too negative here, but it's a story that's been played out over and over. This is how "empty houses" can occur, too, as streets develop a bad name, investors can't get tenants, and houses get grafittied and vandalised. Welcome to post-boom suburbia.

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This really isn't news. Low income people given the promise of the FHOG and developer incentives move to the outermost reaches of outer suburbia land because of the "buy a house for as much as you pay now in rent!" ads. People with more money are less likely to move there.

It always amazes me going to these new areas, seeing all these nice new houses in a new estate with the gardens neglected, several cars in the driveway, the inside of the house is a tip, everyone has dozens of kids and the parents are bogans with bad teeth. I'm sure there's nice new estates on the fringes too but this is what I've seen.

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This really isn't news. Low income people given the promise of the FHOG and developer incentives move to the outermost reaches of outer suburbia land because of the "buy a house for as much as you pay now in rent!" ads. People with more money are less likely to move there.

It always amazes me going to these new areas, seeing all these nice new houses in a new estate with the gardens neglected, several cars in the driveway, the inside of the house is a tip, everyone has dozens of kids and the parents are bogans with bad teeth. I'm sure there's nice new estates on the fringes too but this is what I've seen.

and a tv worth nearly as much as the car

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...This is how "empty houses" can occur, too, as streets develop a bad name, investors can't get tenants, and houses get grafittied and vandalised. Welcome to post-boom suburbia.

That is one of my thougts behind why people claiming they will buy after crash are kidding themselves.

The crash hits hardest in the crappily thrown together places which no one would actually want if there wasn't the promise of getting rich by owning it and, I think, by definition those places are also the ones where the people owning are the highest risk for foreclosure (they're the ones that bought into the boom without the money to buy the nice places).

After the crash they will quickly become really awful.

People that won't buy the examples of "affordable" housing now (you know the ones pulled out in the bull/bear arguments) because of the crappy lcoations and so on are not going to touch those places.

The nice places may drop as well but I don't think anywhere near as badly because of retained desirability.

It would appear that the people claiming to buy after the crash are assuming that 40% drops in the states is not a mix of 70% in some places and 10% in the others.

(Of course this is only if a crash actually happens which I think is being actively fought against and don't see as being hugely likely)

The logic above is largely one of the reasons I ended up allowing myself to consider buying, if you buy something you like and it is affordable I don't think it really matter when you buy it. If the crash comes doesn't really matter as you like the place you are in and even if you had to move then all the other places got cheaper. Fairly safe.

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I am trying to counter the ghetto-isation. I just moved to Guildford. There are actual black people in Australia. Who would have known!?! I was on a visit to Woolworths Granville yesterday and this hot 20-something black woman was manning the register. There are benefits to living small I guess. I wasn't the only one who noticed her because the guy in front of me was overly nice and took an aweful long time to take his change from her hands.

Edited by sydney3000

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California has whole abandoned streets with McMansions.

Even burbs. Read link (the sat photo is a corker):

http://www.good.is/post/ghost-town-the-abandoned-suburb-of-california-city/

Abandoned starter houses taken over by wildcats; swimming pools becoming breeding grounds for West Nile virus–infected mosquitoes; empty buildings gutted by copper thieves with pick-up trucks parked in grass-cracked driveways; foreclosed properties harboring kidnapping victims—over the past few years, there has been no upper limit to the surreal tales coming out of the suburbs.

If we are to believe what we read, abandoned suburbs are a new phenomenon, destined to become dystopian slums, strange perturbations forming on the outermost rims of our cities. But what of suburbs that failed equally spectacularly because they were never even built in the first place?

California had a massive housing shortage in 2006.

townriovistanearsbankruptcyforeclosure8oamlcfdiq6l.jpg

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That is one of my thougts behind why people claiming they will buy after crash are kidding themselves.

The crash hits hardest in the crappily thrown together places which no one would actually want if there wasn't the promise of getting rich by owning it and, I think, by definition those places are also the ones where the people owning are the highest risk for foreclosure (they're the ones that bought into the boom without the money to buy the nice places).

After the crash they will quickly become really awful.

People that won't buy the examples of "affordable" housing now (you know the ones pulled out in the bull/bear arguments) because of the crappy lcoations and so on are not going to touch those places.

The nice places may drop as well but I don't think anywhere near as badly because of retained desirability.

It would appear that the people claiming to buy after the crash are assuming that 40% drops in the states is not a mix of 70% in some places and 10% in the others.

(Of course this is only if a crash actually happens which I think is being actively fought against and don't see as being hugely likely)

The logic above is largely one of the reasons I ended up allowing myself to consider buying, if you buy something you like and it is affordable I don't think it really matter when you buy it. If the crash comes doesn't really matter as you like the place you are in and even if you had to move then all the other places got cheaper. Fairly safe.

That's all well and good for places like Melbourne & Sydney which do have affordable outer rings but what about places like ACT and Darwin that don't? Are ACT and Darwin going to end up with 400k + places loosing 40% value (because that is what their outer rings are going for) or are they going to just be 2 cities that don't crash and no-one can afford to live in at all?

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California has whole abandoned streets with McMansions.

Even burbs. Read link (the sat photo is a corker):

http://www.good.is/p...alifornia-city/

California had a massive housing shortage in 2006.

townriovistanearsbankruptcyforeclosure8oamlcfdiq6l.jpg

Man, if you knew that was gonna happen it would have been best to plonk (not the poster:)) your house on one of the more vacant areas. Rural living in the city - buy out all the land around you after the crash and build a little golf cours, a big pool, footy oval and so on.

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That's all well and good for places like Melbourne & Sydney which do have affordable outer rings but what about places like ACT and Darwin that don't? Are ACT and Darwin going to end up with 400k + places loosing 40% value (because that is what their outer rings are going for) or are they going to just be 2 cities that don't crash and no-one can afford to live in at all?

No that is all well an good for all the places that had the boom followed by excessive construction.

If you think you live in one where it didn't happen you may want to think why your area is not the same as the rest of the world. "It's different here" has been claimed by soooooooo many people on both sides of the camp.

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No that is all well an good for all the places that had the boom followed by excessive construction.

If you think you live in one where it didn't happen you may want to think why your area is not the same as the rest of the world. "It's different here" has been claimed by soooooooo many people on both sides of the camp.

I think your forgetting where I'm coming from Tor - I can't see any sustainable long term future for the country without a crash.

But my post was basically saying that, for the most part, I agree with your post. Sydney and Melbournes outer rings will have greater percentage falls in value than (most) of the inner suburbs. And, it is true that, relative to the average full time wage, these places are (technically) affordable. I think the average of the wage buying into those places is far less than the average national full time wage, though. Meaming the affordability for the residents is no different to the affordability for a new PPOR resident anywhere.

I was asking, what about cities like Canberra and Darwin, which don't have outer rings with house prices that are 4-5x the national full time average wage. Where will these cities be hit hardest?

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I think your forgetting where I'm coming from Tor - I can't see any sustainable long term future for the country without a crash.

But my post was basically saying that, for the most part, I agree with your post. Sydney and Melbournes outer rings will have greater percentage falls in value than (most) of the inner suburbs. And, it is true that, relative to the average full time wage, these places are (technically) affordable. I think the average of the wage buying into those places is far less than the average national full time wage, though. Meaming the affordability for the residents is no different to the affordability for a new PPOR resident anywhere.

I was asking, what about cities like Canberra and Darwin, which don't have outer rings with house prices that are 4-5x the national full time average wage. Where will these cities be hit hardest?

I don't know enough about the specifics to point to an area but I think that the smaller cities have the same problem, hell I think the smaller towns have the same problem.

Look for areas which were developed during the latter stages of the boom. If they happen to be new areas and don't measure up on a fundamental basis they are targets.

I hope that some places got built well which happen to be areas that are well supported by infrastructure; they will be the things that make the boom semi worthwhile as they will supply housing for the next generation but I can't see there being many.

Fortunately I don't think we need many.

Good for the country in the long run not so good for investors or those that buy with the intent of upgrading in a few years.

Getting "your foot on the property ladder" at the moment means you better be smarter than everyone else and have better information than everyone else.

Or just be able to afford what you want.

If your income is not going up 20% pa I think you are screwed in the current environment.

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I don't know Darwin specifics, but know it is dumped in the same 'nothing is affordable' basket as Canberra.

ACT has had more new construction on the north but there are pockets of it all over the place. Infrastructure (by way of public transport and proximity to hospitals) is equally sh*t everywhere (relative to ACT standards anyway) apart from close to the middle. The big govvy departments are popping up big work centres in the middle, north and south - so work is everywhere proximity wise.

It makes the north of Canberra more likely to devalue quickly with your logic, also Jerrabomberra and parts of Queanbeyan - mostly this is technically NSW although it has been grown on ACT debt.

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I don't know Darwin specifics, but know it is dumped in the same 'nothing is affordable' basket as Canberra.

ACT has had more new construction on the north but there are pockets of it all over the place. Infrastructure (by way of public transport and proximity to hospitals) is equally sh*t everywhere (relative to ACT standards anyway) apart from close to the middle. The big govvy departments are popping up big work centres in the middle, north and south - so work is everywhere proximity wise.

It makes the north of Canberra more likely to devalue quickly with your logic, also Jerrabomberra and parts of Queanbeyan - mostly this is technically NSW although it has been grown on ACT debt.

Again I stress I know nothing and should not be acted on in any way :)

However pcokets of building sound a lot more sustainable and less susceptable to a genuine crash. I suspect councils will also be keeping building much more in line with existing houses (despite really wanting some of that stamp duty or whatever money). I would personally avoid any block development in a boom adn would not buy off the plan when the mass media is saying it is all going to burn in a horribly painful way unless I was a professional RE guy and knew much more than the journos.

Sounds to me like canberra may well not crash from what you are saying, just slide into a boring long stagnation[1] provided the work continues and the places built aren't garbage.

If I was to invest in property (which I am not doing and haven't for a few years now) I would say it is still way too risky. Mum and Dad can buy a place and crow about the 1% after tax and inflation returns at the barbecue. Not my thing.

[1] Which is kind of how the rest of us view canberra anyway hehehe

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There was a poster on GHPC (can't remember name) who was in Canberra for the 90s property price correction. He said that Canberra lagged 12-24 mths and didn't downturn until unemployment rose, which was a result of the downturn everwhere else. Pretty sure he claimed prices dropped across the board in the order of 15-20%.

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There was a poster on GHPC (can't remember name) who was in Canberra for the 90s property price correction. He said that Canberra lagged 12-24 mths and didn't downturn until unemployment rose, which was a result of the downturn everwhere else. Pretty sure he claimed prices dropped across the board in the order of 15-20%.

I believe that might have been Maria Santa BA.

If I recall correctly it was post a purge in the APS. Might have even been after the "night of the long knives" when howard sacked a whole bunch of SES from the APS. If you look at Kingstons median (allhomes) for 1995 it was 172000 then it drops to 156000 in 1997 followed by 149500 in 1998. That was about a 13% drop.

I don't know what is happening with the North weston development - it is gone from the allhomes site. Maybe they've sold them all. :blink: Wright and Coombs are being built right now and may eventually fall into the over supply category for the ACT. I hope so cos I quite like the Weston area. :)

Edited by staringclown

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No that is all well an good for all the places that had the boom followed by excessive construction.

If you think you live in one where it didn't happen you may want to think why your area is not the same as the rest of the world. "It's different here" has been claimed by soooooooo many people on both sides of the camp.

Whereas you "know" it is always the same everywhere. Perhaps just delayed by 10 or 30 years.

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