Four Corners: May 2

On the eve of the Federal Budget, Four Corners asks “What happened to the Great Australian Dream?”

Ben Knight reports on the white hot issues of housing affordability and negative gearing and the generation left wondering if they will ever own their own home.

“We will start it at 1.1 million dollars ladies and gentlemen.” – Auctioneer

A house with a million dollar price tag used to be confined to the super wealthy suburbs in Australia’s biggest cities. Today, properties with that sort of asking price are commonplace, even in the urban fringes, with little infrastructure and lengthy commute times.

In Melbourne, the median house price is $700 thousand dollars, around 10 times the average wage. In Sydney, there are suburbs more expensive than Manhattan. It’s why the IMF declared Australia one of the most expensive cities in the world to buy property in.

This week reporter Ben Knight explores the housing crisis locking younger people out of home ownership and the negatively geared world of investors building their nest eggs.

“It’s only money!” – Auctioneer

He meets investors like Wayne and Karen who’ve created a multi-million dollar property portfolio from their dining room table.

“We saw them on the internet, we actually borrowed 105% using the equity we had in our house to fund that.” – Wayne & Karen

And the agents spruiking the investor-led property gold rush.

“Why are people looking at negative gearing? Because it’s generous. It’s a wonderful opportunity for people to become involved in property investment. It’s a gift.” – Real Estate Adviser

With negative gearing and affordable housing shaping up as key issues in the forthcoming election, we look at the politics at work behind the major parties’ policies.

“Labor’s reckless changes will reduce property values. They’ll devalue every home, every property in Australia.” – Prime Minister Malcolm Turnbull.

The Coalition is banking on leaving negative gearing policy exactly the way it is. While the Labor Party is hoping its plan to wind it back will attract those first home buyers who feel locked out by the high price of property.

“We’re not looking to buy an investment property. We want a house we can live in.” – Jules, house hunter

But some economists are warning that there are property bubbles in our major cities, which could wreak havoc on our economy.

“According to pretty much any housing market indicator you want to look at, house prices in Australia are significantly over valued.” – Investment Fund Manager

And there is worrying evidence of fraudulent loan applications which could leave banks and consumers dangerously exposed.

“They’re lending to homebuyers that have no ability to be able to pay off their loan and they’re basically depending on the property market to continue to rise at a consistent rate.” – Economist

While for some first home buyers, a housing crash is just what they are hoping for.

“Are we all done…?” – Auctioneer

Monday May 2 at 8.30pm on ABC.