When my parents were my age, they were well on the way to buying a second home. I, on the other hand, can barely scrape together the money required for a deposit. I work in an industry characterised by stagnant wages and diminishing possibilities. I’ve barely made a dent in my HECS debt; I’m too busy whittling down the debt I’ve accumulated on my credit cards. I’m not an exorbitant spender; I rarely buy new clothes; I feel guilty for ‘going out’. I live in the psychological shadow cast by my debts, even as my bank balance ebbs and flows, inching overall towards financial solvency. Being in debt doesn’t make you a bad person, but it can make you feel like a failed grown-up. Many of the decisions we make in adulthood have big consequences, and it can be kind of dispiriting when you discover you’re making the wrong ones. Yet the ramifications of these decisions are not just personal, but also social and political.
Australia’s high level of homeownership across all levels of society and income has been given as evidence that our country has been and still is an egalitarian one, that the Australian dream of homeownership it still an achievable one, even as ballooning house prices in capital cities become an increasingly heavy financial burden. Since the Second World War the dream of homeownership has eclipsed all others. The longstanding obsession with owning a home continues to be an integral part of our national mythology. With the mining investment boom poised to collapse, increasing underemployment and a surging cost of living, the stagnation of our country’s ambitions should be a cause for alarm. Are we being let down by narrow, limited aspirations?
Rarely a day goes by when you won’t come across conflicting views on the health of the housing market. The topic almost always incites collective hysteria and an avalanche of unsolicited opinion. Investor speculation is driving up prices, says one article. Some online commenters blame foreign investment from ‘the Asians’. Reserve Bank of Australia governor Glenn Stevens says the market is not in bubble territory, while some prominent US economists beg to differ. Can continually rising asset prices be justified? I’m told it’s a vexed question. Analysts from French bank Société Générale warn that our property market is ‘grotesquely overvalued’ and that a recession is just around the corner. In July the RBA released a research paper that finally stated what many have been thinking: most Australians would be financially better off renting than buying. As a likely lifelong member of what an ABC commentator has called the ‘rental underclass’, I read this particular report with a sense of relief.
Yet the way that homeownership is still referred to as the ‘dream’ suggests it remains the ultimate goal for many. Over the past decade, shows about housing and home makeovers have dominated the Australian reality TV landscape. Along with The Block, which debuted more than ten years ago, there have been offerings such as Backyard Blitz, House Rules, DIY to the Rescue, Renovation Rescue, Hot Auctions, Hot Property, Auction Squad, Location Location, Domestic Blitz, Our House, Selling Houses Australia and Grand Designs. I can’t claim to know anything about housing bubbles, but there may well be a bubble in this TV genre.
The Block first screened on Australian TV in 2003, in the midst of what was shaping up to be an unprecedented housing boom across the country. Ian Buchanan wrote in the Australian Humanities Review that its creators, Julian Cress and David Barbour, conceived it as a way of capitalising on two of this era’s biggest cultural trends: reality TV and home renovation. A distillate of shows such as Sylvania Waters, Melrose Place, Big Brother, Changing Rooms and Survivor, the creators thought, could be a highly profitable and exportable product. And they were right: more than two million people regularly watched episodes of the earlier seasons, and the show was adapted and broadcast in more than ten countries.
The format has changed slightly over time but the essence of the show has remained the same. In the first season, four couples were given $40,000 each to renovate an apartment in a derelict block of flats in Roscoe Street, Bondi, over a period of two weeks. Their efforts culminated in an auction, which allowed each couple to keep any profits made above their apartment’s reserve price. The couple who made the highest profit pocketed an additional $100,000 in prize money. That year a married couple—Adam Thorn and Fiona Mills, from Banksia in Sydney’s south—made a profit of $156,000. But the benefits to the contestants weren’t only financial: Mills modelled on the front cover of Ralph magazine and another contestant, Amity Dry, parlayed her newfound fame into a singing career. The initial series ran for two seasons then returned in 2010 with a new host (Scott Cam), new renovation challenges and a new location (Melbourne), but the essence of the show remains the same. Although it has since been revealed that the location of the ninth season is a former office block known on the show as the Glasshouse, for a while it was rumoured that filming would take place at a rundown motel in Prahran where a woman was viciously attacked and raped by a man dubbed the ‘vampire gigolo’ by the press. No-one involved would confirm or deny the rumours, though the real estate agent in charge of the property’s sale told the Age that it would be a ‘fantastic location for any future development and it will have fantastic city views’.
The market eventually decides who wins The Block, but the event can be anticlimactic. When a property is passed in, or if there are no bids, it feels like a major indignity. In any case, the epic renovation challenges that lead up to the auction are the real narrative drawcard. While many reality TV shows rely on bitchiness to sustain the audience’s interest, The Block cultivates suspense through the possibility of an undesirable financial outcome: the ever-present fear that contestants’ time and labour may be for naught. Tears and breakdowns are par for the course. But in spite of the pressure, contestants rarely bitch about each other, especially in the later seasons. Despite the differing professional backgrounds of the contestants (career renovators, miners, surfers, data analysts), everyone understands and works towards the property market’s ultimate goal: profit maximisation. (Contestants often compliment each other on a job well done; whether the market rewards them for their labour is another matter.) For the audience, the function of the auction is solely dramatic. It heightens the tensions and stresses of the bidding process, eliciting sympathy for couples who do not sell their property for a profit or, worse still, cannot sell it during the auction at all.
Before this year I had watched only snippets of episodes of The Block. Its existence had largely receded from memory until I came across a news item that concerned the buyer of an apartment in the show’s eighth season last year. The successful bidder, a 26-year-old dealing desk broker at NAB named Lukas Kamay, bid $2.375 million for a three-bedroom loft apartment in Albert Park, $616,000 above its reserve price of $1.76 million.
In May this year, Kamay was implicated in an insider trading scandal that allegedly enabled him to make $7 million by drawing on confidential data from the Australian Bureau of Statistics to anticipate movements in the foreign exchange market. And then I remembered that one month earlier another former reality TV star had been caught up in a similar case. I couldn’t stop myself from reading story after story on Aaron Thomas, a 26-year-old former contestant on MasterChef who has been accused of embezzling about $7.6 million from Oakmont Resources, a company he once described to investors as ‘the Facebook of mining’.
Then it hit me. I’d known Thomas (admittedly not very well) as a teenager through swim squad training. He seemed like your average private schoolboy—a bit bratty, perhaps—but no different from most fourteen year olds. I struggled to recall any distinguishing or remarkable features about him. Before training sessions began, we’d do forward tucks off the three-metre springboard. The first thing that came to my mind was an image of his mother, an impeccably dressed woman who enjoyed local celebrity as the owner of Golliwog’s Toy Store in Brighton, where I grew up. It was strange to see someone I remembered as a pudgy, ordinary kid described as a ‘playboy CEO’ by the Daily Mail and the New York Post. I lapped up every detail of his decadence: US$141,500 on Rolex, Hubot and Jager-LeCoultre watches; $30,000 on a charted yacht in the Turks and Caicos Islands; $20,000 for his fiancée’s breast implants; $14,500 a month for a Manhattan apartment. A lawsuit filed by Oakmont’s lawyers has alleged that there could be ‘no possible business purpose for these expenses’.
That Kamay and Thomas were both in their mid twenties, had garnered a flash of fame on reality TV and happened to be white-collar criminals is a coincidence, but it is a striking one. Obviously their actions should not be considered illustrative of my generation’s ambitions. Mostly I was intrigued by their motives. Thomas, at least when I knew him, enjoyed a comfortable, upper-middle class upbringing. I know nothing of Kamay’s background except for what I’ve seen in the papers. He was the pride of his Catholic school, and was invited as a guest speaker at a school assembly only last year. He seemed to achieve financial success early on in his career: he had graduated from Monash University before working as an intern and analyst at JB Were and then taking up a position in NAB’s stockbroking division. Even in his early twenties he owned cars that cost more than double, sometimes triple, my annual salary. I can perhaps understand the desire to live in a bigger house and drive a flashy car if you have experienced financial hardship and the indignity of poorly remunerated work. But if you’re accustomed to financial comfort, does wealth still have the same allure?
In an essay published in Portfolio magazine in 2008, financial journalist Michael Lewis questioned the origin myth of the US subprime crisis that occurred that year. He explored not only the chasms of difference between the rich and the poor in the United States but also the similarities. Across all income brackets, he said, the family home is a marker of success and a metric for social ranking. It’s this ‘peculiar willingness … to risk it all for a house above [one’s] station’, Lewis argued, that is the fundamental reason for the crisis. Sure, banks behaved badly, and the financial market has myriad flaws, but they were not solely to blame for the insatiable desire for a life upgrade that most people could not afford. There’s no doubt that predatory banking behaviour made it a whole lot easier.
People do not treat buying a house merely as a financial transaction; it’s an emotional one, too. We fall in love with a house and its neighbourhood. We find ourselves seduced, time and time again, by the illusory promise of a better life. Unfortunately, history shows us that humans cannot be relied upon to behave rationally. This is especially true in the housing market, where even one exceptionally high sale price can skew a suburb’s median house price and perceptions of an area’s value. Predicting price movements is a parlour game for journalists, homeowners and real estate agents alike. It’s essentially water cooler gossip. The speculation is fun, but the stakes are real.
Housing has always been central to how we define ourselves, and is an ‘acceptable lust’ for everyone. In Australia the division between those who can afford to buy a house and those who can’t is deepening. The gap between the middle classes and Australia’s super rich is also becoming harder to bridge. Yet people in all kinds of financial situations identify as ‘middle class’. It’s a category so bloated it has become meaningless. To consider yourself ‘upper middle class’ is to politely deny your privilege because it allows you to group yourself with those in the ‘true’ middle class and to compete against them (and win) on a playing field that is far from level. Or, as Lewis puts it: ‘It’s a way of saying you’re “well-off” without having to say [you’re] rich’, even if, by most standards, you are.’
The excesses of Thomas and Kamay hint at an underlying truth: that the only force more seductive than wealth in the abstract is the material goods it allows you to accumulate and categorise. It’s why art and car collectors are sustained by their hobby; the object’s utility is hardly the point. This attitude also applies to housing: one has the family home, but with enough money one can acquire an investment property, a ski lodge, an inner-city ‘crash pad’, a farm. To treat housing as a fetish object, rather than a capital growth strategy or a source of stability, is perhaps the greatest luxury of all.
Conversations about houses and their worth are enmeshed in a broader national conversation about aspiration and economics that is reinforced by the endless parade of lifestyle TV programs that teach us how we can ‘add value’ (feature walls, statement light fittings, European appliances). The Housing Industry Association has said that Australians spend in excess of $31 billion on renovation projects each year, but emulating the shoddy practices seen on TV can often devalue the property. But as ever, TV producers have capitalised on this calamity: DIY disasters are a great way to elicit viewer schadenfreude. On Foxtel, botched renovations and their transformation are at the centre of many episodes on the LifeStyle Channel’s Selling Houses Australia, a show that places ‘the most desperate ever home owners, some up to their eyeballs in debt’ (according to its promotional material), in a starring role. As of 2013, it was the highest-rating show in Foxtel’s history.
Property is widely regarded by many Australians as a safer income stream than, say, parking cash in the share market. It’s the reason we have one of the highest rates of homeownership in the world, although the number of people who own their home outright has sharply declined since the nineties. This is probably because house prices quadrupled between 1986 and 2005 and have increased by a further 50 per cent in the years since. The reality that a housing crash was at the centre of no fewer than five financial crises in the developed world prior to the 2008 US subprime crisis has done little to trouble prospective homeowners. But their unequivocal faith in real estate is justified. Despite more than two decades of compulsory superannuation, many Australian workers will find that the value of their home dwarves the pool of savings in their super accounts. Moreover, the means test for the age pension in Australia excludes the value of one’s principal home, which may explain why 80 per cent of people over sixty-five holding more than $1 million in assets are still eligible for financial assistance from the government.
One economics commentator suggested that low yields from superannuation funds have prompted savvy investors to treat housing as an annuity, in which the income from rent is used to fund their retirement. A report released by Deloitte this year suggested that as a greater number of Australians become ‘cash poor’ in retirement, reverse mortgages—high-interest loans that provide cash payments based on home equity—may increase in popularity. (This sounds attractive until one considers that the income received is much lower than the capital appreciation of one’s home, and that interest compounds over the term of the loan, which means debt can accrue rapidly.) Selling a house and living off the proceeds is another option, but many people seem unwilling to move or downsize in their twilight years for reasons that are psychological rather than financial.
Meanwhile, younger people can’t get a foot in the door. Research undertaken by the Department of Social Services this year has shown that Australian pensioners have a high level of housing wealth when compared to people of pension age in Nordic countries, Britain and Italy. They are ‘asset-rich and income-poor’. The report also notes that ‘Australia is unusual in that economic exclusion among the elderly is closely linked to a lack of homeownership (or access to public housing).’ This is grim news for the elderly who have been locked out of the property market, and hints at the gloomy prospects facing renters.
Australian lawmakers typically regard renters with disdain: residential rights and protections in Australia compare unfavourably with those in many European countries. A Choice infographic comparing the rights of Australian renters to those in Germany, the Netherlands, France, Denmark and Ireland underscores some stark differences. Australian renters have minimum fixed leases of six months or a year, although they can sometimes be shorter; French and Irish tenants have minimum leases of three and four years respectively; the other countries’ leases are for an indefinite period of time. Australia is the only country in the group that does not require a reason for eviction, nor a control on costs. Renting is seen as insecure but only because Australian lawmakers have designed it that way.
Reform is an unlikely prospect given housing’s sacred status in the national discourse. Any policy proposal that could jeopardise house prices guarantees political death. Negative gearing, for instance, was introduced to boost Australia’s housing supply and increase employment in the construction industry. But its success has been contentious: it has encouraged speculation and resulted in investors pushing up prices; it is most often used on existing dwellings rather than new ones; and its benefits largely accrue to people with higher incomes. It’s essentially a tax break subsidised by non-investors that reduces government revenue by billions each year, lessening the Commonwealth’s ability to provide social security programs, and possibly contributes to a widening socioeconomic divide. Yet no party will change the policy. As long as housing is at the forefront of the middle-class psyche, it will continue to hijack the political and economic debate.
If The Block represents earnest, middle-class striving, then The Real Housewives of Melbourne is its diametric opposite, revealing what happens when ambition reaches a dead end. The outsized egos, clingy gowns and low-stakes self-mythologising would not be out of place at the Logies. These women are physically demonstrative specimens. Simple hand gestures look like pantomime. My favourite housewife-cum-barrister, Gina Liano, looks like an amped-up Sophia Loren, and is surely deserving of a commemorative stamp.
Real Housewives is not a show about housing renovation, yet real estate and postcode pride are just as important as the scripted bitchiness. It depicts wealth by deploying recognisable, visible signifiers. We know these women are rich (and not just well off) because they are dripping in designer labels, even when they’re lounging around at home. You’ll not find any wallflowers wearing Jil Sander on Real Housewives, but you can ogle plenty of Cavalli, Bulgari, Gucci, Jimmy Choo and Versace. Bottles of Dom Perignon are uncorked at 11 am. They go to launches for liposuction machines.
It is not a show that prizes subtlety. Its message could be communicated as effectively by waving wads of cash under the audience’s noses. Critics have derided the show’s vulgarity and unabashed displays of wealth, implying the visibility of money makes for an unpalatable viewing experience. In one of many memorable exchanges, Jackie, resident psychic and wife of silverchair drummer Ben Gillies, is called a cashed-up bogan by Andrea, the wife of a renowned Toorak plastic surgeon. (Andrea is a woman who informs the viewers that ‘Toorak is the Beverly Hills of Australia’, and that she feels she ‘needs a passport’ to leave the suburb.) Money is mentioned explicitly and often: the women fight over restaurant bills, extol the virtues of designer ski gear, and casually drop dollar figures during conversation. The opulence is always gratuitous, and the disdain for an average income is exaggerated. These women float above the exigencies of a job, so any income they derive is incidental.
My initial reaction was somewhat similar to those expressed by the show’s most vociferous critics. (This is not a Melbourne show, many sniffed. The show’s ‘lack of class’ was another common diss.) But as I kept watching, my stance towards these women softened. Society may deem it impolite to talk about money, but is it better to wilfully ignore money and class completely? Tackiness carries a certain social stigma: it boldly declares one’s aspirations. Tacky can never be ‘cool’ because ‘cool’ requires a studied indifference. Neither approach can claim the moral high ground. Few reality TV shows are as self-conscious about wealth, and fewer still are so desperate to cleave a distinction between the nebulous middle and moneyed classes. In this respect it is vastly different to The Block, which ignores such divisions altogether.
A sense of entitlement can be a handy thing to have in a professional context, but I suspect it has clouded my perceptions of what someone like me, in my financial situation, could ever hope to achieve. I used to think homeownership would guarantee me a degree of financial stability: people often call rent money ‘dead money’, because you’re essentially paying off someone else’s investment property. By forgoing homeownership and a lifetime of mortgage repayments, had I also sacrificed my financial security in the future? American essayist Meghan Daum, then twenty-nine and writing for the New Yorker about Manhattan in the late nineties, articulated this anxiety perfectly: ‘A sense of entitlement … made it hard to recognise where ambition and chutzpah end and potential bankruptcy begins.’
But these ambitions, namely financial stability through homeownership, don’t arise in a vacuum. They are implicitly sanctioned by the state, embedded in our politics and reiterated by our culture. If you work hard, you deserve a nice house, no matter the cost. This ethos is not a sign of an egalitarian society, but of a meritocratic one: an ideal that uncritically rewards differences in skill and effort without recognising why those differences exist in the first place, or any concern for what the implications for society might be. If for some reason you don’t succeed in your aspirations, it’s solely your fault. The government is unlikely to lend you a helping hand; you’ll have to help yourself. Reality TV is often excoriated for its falsity, but its glossy patina can contain grimmer truths. Society is getting meaner; communities are becoming insular; social mobility is fast becoming a delusion. That more and more Australians can no longer afford to own a home is problematic not because we deserve to own homes—many of us probably won’t because the circumstances are against us. But what is the point of government if not to create a society that is equitable and secure? Perhaps it’s the prospect of old-age poverty or the slow erosion of the social safety net, but I can’t help but feel the forces of politics and economics are conspiring against my generation and the next. Deciding between a life of precarity or a life of debt hardly seems like a choice at all.