I Blame Myself
First-home buyers are causing their own pain from interest rate increases and rising home purchase prices. It’s true, somewhat. But I blame the willingness of home buyers to accept auctions as the default sales mechanism, rather than whopping great home loans. Mortgage repayments are normally viewed as a percentage of income, rather than whether or not your carrying $300-500,000 in principal, although that, too, can indeed be a problem, mainly, again however, because a rate rise could put the monthly repayment percentage over what you’re reasonably capable of managing, cutting into your food budget, for example.

I also blame the State and local governments, which tax so heavily that, if you buy an apartment, you’re also stuck paying building levies that have no return value. Our apartment in Surry Hills cost us significant money on a quarterly basis, in addition to our own council and water rates, essentially meaning we were paying twice for those services. The rest of the building’s budget was mainly hallway lighting and elevator maintenance. Heat and hot water were our own cost. This makes city living a pretty expensive proposition.

Now add on to that sitting in a room with a dozen other people who want to buy the property, often just as an investment, because they accrue tax advantages, whereas residential home owners do not, and everybody’s adding a thousand, five thousand dollars every 10-30 seconds until they’ve blown out whatever budget they came in with and yours, too. Suddenly, a property worth $400,000 is now $500,000. If private treaty were the norm, one offer over your own, and you’d go looking for the next place, you’d stick to your budget more easily. I’m a bit of a cheapskate, so it was easy for me to hit my limit at auction and stay there, when I could have kept on, offered a thousand more than the winning bid, and maybe taken the place. But I’d have to live with seeing my savings entirely wiped out, with little chance of rebuilding enough for emergencies, let alone another, soonish, trip back to the US. And these are relatively minor concerns.

So blame my mortgage, if you want, but own up: State and local taxes are sources of financial stress in home ownership, and auctions are a blight.