The Sydney Obsession
There is no escape. Absolutely everyone in Sydney talks about real estate. If you’re renting, you’re talking about buying; if you’re buying, you’re talking about what you’ve seen; if you own, you talk about your mortgage. Every gathering of any size is an opportunity. Every minute consideration is exhaustively examined, every triumph savored, every set-back wallowed in for whatever comforting horror stories you can receive in exchange for your own. It’s endless.

It doesn’t help that many of us take on mortgages that leave our disposable income in need of such tight controls that a weekend at the movies can nearly mean missing a payment, let alone that those on variable rates are subject to the inflationary measures of the Reserve Bank, pushing their repayments up and up to the breaking point. There are many mortgagee sales around the greater Sydney area, and an expectation of yet more to come. This would be a great time to buy, but the fact is that clearance rates have also fallen, whether for private treaty sales or auctions.

Meanwhile, somehow this has also meant that rental units are at an all-time low in availability, a situation exacerbated by the return of the university students, all in search of a cheap unit somewhere not too far from campus, preferably in Newtown, a suburb seemingly devoted to youth culture, but also Glebe and much of the rest of the Inner West. Competition is fierce. Renters line up at open viewings, and it’s pretty much first-come, first-served thereafter. Agents can’t be bothered to show units privately or to show up at showings on time, often enough. They’re rude, curt, dismissive of the concerns of people desperate for housing, especially at the “lower” end of the market – anything under $300 per week. Mind you, even $250 per week is over $1000 per month ($13000 annually), and to afford that you’re going to need a decent job. You will, after all, pay for electricity, food, transportation, and a phone, as well as an internet connection, potentially, and clothes, or laundry at least, various grooming requirements, and some relief in terms of entertainment. It all adds up pretty quickly, and taxes take a fair whack off the top of your wage, leaving little enough to begin with. Thank goodness there are still doctors who bulk-bill, but dentistry isn’t covered, and if you need a filling or crowns or a medical procedure that really can’t wait, some private health insurance isn’t a luxury.

So what can you get? Moldy carpets, chipped paint, plastic plumbing fixtures, and a kitchen that hasn’t been cleaned in a year or more (let alone windows that have), in a walk-up block of flats where the unit door doesn’t fit snugly in the jamb. We saw an amazing number of those when we were looking for our interim rental after we first moved to Sydney, and we were looking at the higher end of things. Units with no divider between the kitchen and the garage, like some new version of a peasant’s hovel, an automobile in place of the cow. Units where the investor-owner has bought the place purely for the negative-gearing, and so puts in no effort whatsoever to ensure a rental income, allowing the place to become run-down. Units where the developer has put no foresight into the design. I remember one place where renovations were made to add a bedroom in the space between the ceiling and the roof. This attic room would have been a valuable addition, except the stairs up to it took up three-quarters of the living room.

Will the unit be cleaned? No. Will it be painted? You can paint it if you want. Will something be done about the stain on the carpet that looks like the previous tenant brought their car engine in to rebuild it? It’s new. (Huh?)

Here’s my favorite: New York-style loft. It means small, with especially low ceilings, so a second level could be crammed in. (It’s like when you’re travelling outside New York City and see “New York-style pizza,” which just means nasty, lowest common denominator ingredients, and with a crust like cardboard.)

The thing is, however, that right now, renting is cheaper than buying. Short- and long-term. Right now, your money’s better off anywhere but in real estate, at least if what you’re trying to accomplish is having a place to live. If you’re capable of investing, it’s still worthwhile to have a unit or two, even if just to claim the negative gearing, let alone hanging on to it to sell when the market takes off again. The rich get richer, and the rest of us live in Ashfield.