Oh the irony. Federal MP priced-out of own electorate

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By Leith van Onselen

Remember when Treasurer Joe Hockey told first home buyers (FHBs) “to get a good job that pays good money” if they want to afford a home.

Well, perhaps Hockey should have a chat to federal MP for Wills, Peter Khalil, whose family has been “effectively priced out” of Brusnwick in Melbourne’s inner-North, despite being on a salary of more than $200,000 a year (not including generous allowances). From The Age:

The Labor backbencher says the “stressful experience” of the forced move has highlighted the plight of local renters and would-be home owners who are not lucky enough to enjoy six-figure incomes.

Mr Khalil is not alone in being overwhelmed by the cost of living in Brunswick where median house prices have soared from $860,000 in 2016 to $1.06 million this year…

The MP told Fairfax Media he was notified in August that his landlord wanted the Khalil family out of Stewart Street rental so the house could be put on the market.

“We tried to contact the owners to see if they were interested in selling, rather than us moving with two little kids,” Mr Khalil said.

“That’s when they came back and said they were looking for something like $1.9 million and my jaw just hit the floor; there was no way we could go near that.”

Mr Khalil said he thought his MP’s salary would allow he and his wife, who works part-time, to buy a new house without having to move too far.

He was wrong.

“We could not get near any of the properties for sale in Brunswick,” Mr Khalil said.

“I was shocked that with this fantastic salary that an MP gets, we couldn’t get into that market.

“We could not get near any of the properties for sale in Brunswick…

“Effectively we were priced out”.

Eventually, with a little help from his parents, Mr Khalil was able to buy a property in the more affordable Pascoe Vale end of his electorate, but says the episode gave him an idea of the impact of Melbourne’s affordability crisis.

“It highlights for me in a very literal way, how hard it is for young families to get into the market these days,” he said.

Welcome to the lived experience of an entire generation of younger Australians, Mr Khalil, priced-out by daft federal government policies like mass immigration, lax enforcement of foreign ownership rules, lax money laundering rules, as well as negative gearing and capital concessions.

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Of course, unlike you, most FHBs don’t have an investment property in Murrumbeena to liquidate.

Still, if more politicians like Peter Khalil experienced the housing problem first hand, then we might actually see some meaningful reform and anti-bubble policies.

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About the author
Leith van Onselen is Chief Economist at the MB Fund and MB Super. He is also a co-founder of MacroBusiness. Leith has previously worked at the Australian Treasury, Victorian Treasury and Goldman Sachs.