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A little something about affordability
The OECD recognises affordable quality housing as being a fundamental need in reducing poverty throughout the world. It is identified as a key element that governments around the world need to address. This is in order for them to enhance quality of life and meet targets for many social policy objectives.
Many first world nations struggle to meet the basic goal of providing affordable homes for their populations to live in. An investigation some years ago, discovered that between 1972 and 2009 the average wage in Brisbane, Australia, increased by approximately 400%. In the same period the cost of housing increased by approximately 4,000%. In April 2018 the median housing price in Brisbane was approximately Au$650,000.
Now, years ago before the great recession of 2008 responsible lenders would conservatively allow someone to have a debt to income ratio of 0.35. Meaning that the combined household debt repayments could only total 35% of the monthly household income. This criteria was flexible under individual circumstances however was designed to ensure that people were not getting in over their heads. Obviously this was not the widespread case however but that is another story.
So let’s base our calculations on that conservative figure. If you’re not sure what this means it is quite simple. In order to get a mortgage to buy a home for every $100 that you earned you could not be paying more than $35 back in debt payments. Keep in mind that this means total debt.
I’m using Brisbane and Australia in general as my market choice because that’s what I’m currently most familiar with. However the principles are the same regardless of where you live.
In November 2017 the Australian Bureau of Statistics reported that the median Australian income was $1,567.90 per week. This is for a full time adult and works out to approximately $75,000 per year. This however is only for those working full time.
Fact Check from the 2016 Census
The 2016 census recorded 6.6 million people or 57.7% of the working age population as being full-time workers. A further 4.8 million people were either part-time workers, away from work or classified as unemployed. What does this mean to housing affordability. IMHBVAO this median income figure doesn’t mean shit from a practical point of view.
The median figures found in the census actually state that for people over 15 years old the true median incomes were:
For singles was $662 per week or $31,776 per year.
For families was $1,734 per week or 83,232 per year
Households earned $1,438 per week or $69,024 per year.
So let’s compare these figures with how banks decide to lend average people money for a home.
The average person over 15, making the median of $31,776 will be allowed to have $11,121.60 in total debt repayments. This is in order to qualify for a mortgage. After this they also consider living costs and other budgeted items as well as how much you have in savings.
However let’s say you have saved a 20% deposit you own your own car and you don’t have a credit card or any other loans. This $11,121.60 is a mortgage repayment of approximately $926.80 per month. If you be conservative and budget for fluctuations in interest rates you might be able to borrow between $160,000 and $180,000 as a single person with no other assistance.
A family (Mum, Dad & 2 rugrats) might be able to borrow between $250,000 and $280,000. When the median house price is close to 3 times what you can afford to borrow over 30 years that becomes an issue.
This is a challenge that I’ve faced over the last several years personally. I have faced some financial hardships having lost jobs and investments due to economic challenges. I find going through my rationale for my decisions helps me think more clearly about what I am looking for.
Over the last few years I’ve had setbacks due to personal illness and took three years out of my working life to go back to school to earn a business degree.
Fortunately I am single with no kids to be concerned about. This is both a blessing and a challenge. I am still relatively young, not quite 40 and I’m upwardly mobile and once again relatively fit. I have these things going for me. However being single, I do everything on my own and don’t have the additional financial capacity that couples enjoy.
So this was a challenge for me to look for alternatives that would allow comfort, while feeling a sense of achievement without a compromise. So I started researching the creative ways people are using to unburden themselves and live a greater quality of life. This was a rabbit hole that I did not expect to enjoy diving down as much as I did.
A place to start from
Now I should say that I have yet to actually tackle the reality of the project that I am working through here. This is more of a thought experiment and a way of planning out what I intend to do when I am able to.
My first thoughts were what do I actually want for myself. I want a place to put up my feet, a place to work and a place to play. I also want the ability to have a spare room for friends and family or the possibility of growing into it if I happen to end up with a family of my own.
A place to put up my feet.
So starting with a place to put up my feet I decided on 3 bedrooms because at least that way I could use one as a study if necessary. 2 Bathrooms would be good which would include a guest|visitor bathroom and my own ensuite. A decent size wardrobe if not a walk in just incase I end up with a room mate. Kitchen obviously, and lounge as well as a laundry area.
Efficient & Comfortable
I don’t need a huge amount of space but I do want everything to be efficient on design, price and maintenance. As a result of this I decided pre-constructed could suit nicely.
There are a lot of companies building luxury pre-built structures that can be easily transported. When I was doing my research I started looking at a lot of the various truck and van conversions, buses turned into luxury motorhomes and expedition vehicles that people are using to take their home on the road.
I personally love to travel but when it comes to a place to put my feet up I do like the idea of having a place to come home to and base myself.
By using pre-constructed you can effectively find a model that suits your needs and have it put straight down on your block of land. This eliminates construction issues and delays.
Plumbing, Electricity & Internet. Heating|Cooling & Insulation. Energy efficiency and ongoing maintenance and cost of a place is something that I want to keep as low as possible; while getting everything I need to live comfortably. I live in an environment where we regularly have relative humidity of about 80-90% as well as winters that can have temperatures that drop to almost 0. We regularly have pretty nasty storms and Brisbane has been hit by record flooding twice since 2010.
These were considerations so I want something that is going to keep me warm in the winter cool in the summer and doesn’t cost a bomb in power. Because of the potential for hazardous weather I would like it to be relatively self sufficient when necessary and so can generate and store our own power while also holding sufficient water reserves to cover my needs in the event of an emergency.
Plumbing & Water Supply
Having access to city plumbing and city water makes for comfort and convenience and so this is something that I would very much pursue. However onsite water storage for drinking water as well as grey water usage is something that I would like to have to offer that additional level of self sufficiency.
I figured that a maximum water storage capacity of 150,000 litres would be far more than I need as a single however would be great to cater for a small family. Considering that many of the water storage tanks on the market these days go as high as 30,000 litres it could be a relatively simple task of building up to a maximum capacity based on available space and need. Five of these high capacity tanks both submerged and above ground could potentially meet all of our needs and minimise our reliance on public water.
There is also the issue of plumbing for sewerage, having access to public sewerage or private septic systems. Having setups that can distribute grey and recycled effluent for irrigation is very handy. It also reduces the dependancy on external infrastructure.
Power Generation & Storage
Green energy is essential in a modern home as it reduces our carbon footprint, removes our dependance on public infrastructure and reduces the burden we place on public money. I see this as a win, win, win situation. A reduced carbon footprint makes the environmental warriors happier. The self sufficiency makes the preppers happy.
Let’s face it government is usually pretty fucking useless when it comes to fiscal responsibility so less demand on public infrastructure might actually mean they can channel more funds into worthwhile projects. So it’s also socially responsible.
So a solar farm on your roof can generate a great deal of power in sunny environments. It can also be fed back to the grid for incentives or tax breaks from government. It means your risk of brown outs and extended loss of power is minimised.
Then there is the storage issue. Modern solar systems have yet to be able to store energy however these can be coupled with storage batteries such as technologies being developed by companies like Tesla. These battery options can store and provided energy during the night or at times when sunlight is at its lowest. You could also use small wind turbines in high wind areas to supplement the solar systems.
Heating|Cooling & Insulation
These issues are simple enough to solve with the right insulation, underfloor heating for the ensuite and air-conditioning units.
A Place to Work
Having a dedicated studio and office area where I can pursue photo and video projects build websites or educate myself is important to me. Since I have a goal of one day running my own business making money from websites, photography video or any creative projects that I can think of I want a place to work. I like the idea of having a separate place to pursue my interests and work that is separate from my living space.
So my studio | office will need to house enough space for photo studio space would ideally be about 12 metres long by 5 metres wide. I need to be able to house my digital darkroom which is going to also double as my office setup. So I have a setup in mind that includes multiple monitors a dock for my laptop and a secondary tower to house my home server. Sufficed to say I will need a bit of space that will be at least 3 metres of wall space. Just to make it comfortable.
I’ll also need space for a printer scanner and storage and a small kitchenette won’t go astray either. Not to mention space for any models to change in, lighting rigs and prop storage.
A Place to Play In
This is going to serve a dual function as a place to house a workshop for home handyman jobs. I can also do running repairs or custom build items that I might use as a photographer.
This is effectively my man cave where I can also park my car, house my tools and garden care items. In general this is the place where I can get a bit more dirty with my projects.
Networking & Smart Systems
I want my network to reach all of my areas whether it’s the wireless or wired setups and I want full functionality across each of the three areas for work, play and life.
Personally I’m security conscious and so the idea of smart systems have their limits as to what I will allow. The fact is if it can be built it can be hacked. This can occur regardless of whether it’s networked or its a physical device however I’m not inclined to make it easy whether your on site or not.
So there are specific precautions that I would take in order to protect my property and my personal information. Wireless is convenient however it has its’ weaknesses. I would therefore have my place wired with high speed ethernet cables that can be easily accessed. As technology changes this cabling will need to be upgraded to keep up. I would aim to have a wired internet connection in each room. Wireless is a must but I also want the ability to disable my wireless whenever I want easily.
I would break my systems into two primary categories. Physical access to and from my residence and networked systems. Physical access will never be networked, although I don’t have any issues with electronic locks. They will just never be accessible to anyone who does not have physical access to them.
I’m inclined to have two primary networks, one that has my internal network and smart systems. The second is my primary internet network that has both hardwired and wireless capabilities in every room of the house.
If you’ve made it this far then well done or if you’ve just skipped ahead to see what kind of solution I’m thinking about. Like I’ve already said I’m looking for efficient affordable and reasonably priced. I want my money to go as far as possible so I’m inclined to spend more money on items that add value for me such as renewable energy solutions.
My solutions are simple. Pre-fabricated buildings that offer luxury and convenience at cheaper prices. There are any number of vendors that you can buy these from and it is a matter of having the structure delivered and placed on solid foundations.
The beauty of this kind of setup is that concrete slabs are not really necessary except for my garage and workshop area. My studio and residence can be placed on raised foundations with minimal effort. Resulting in a ready to go home that just needs to be decorated.
I can also do one part at a time as money becomes available or just do it all in one hit. I also need to consider the cost of the land into my calculations. However I’m confident I can achieve a pretty luxurious setup with all the trimmings for a reasonable price.