FOLLOWING the disasters of the Opal Tower and Mascot Towers and others … apart from the appointment of a NSW Building Commissioner, CAAN did a search to find out whether the legislation had been introduced in NSW requiring builders and designers to be registered. This is what we found among the reports:
1 July 2020:
The Design and Building Practitioners Act 2020 comes into effect – but is it designed right?
A new OECD Report, reveals Australian households have more mortgage debt, and our house prices rose 120% in the 20 years to 2020!
We suggest, however, it is not only the hike of the last two decades … but why did house prices escalate in a matter of weeks over Christmas to January 2021?
We are told ‘it’s the market’ … that’s what Agents say
… BUT who set the prices?
In 2020 Agents before launching house sale campaigns … we have been told … argued that they market by advertising a low price guide to entice more buyers.
But in January 2021 we saw that some like houses went on the market at the reserve or above! At $200,000 more than the sale prices of those in November/December 2020!
Was it through these agents ‘laying the track’ that set the course for the
further escalation of prices across Australia in 2021?
Real Estate Agents, or rather the game now being played is to ask Buyers how much would they pay? And as the campaign rolls on with dozens if not 100 aspirant buyers competing for the same house … in a 30 minute ‘Open Home’ … the price rises …
There may only be one or two ‘Open Homes’ available in a week … maintaining FOMO with this high competition … it would seem that the ‘marketing’ needs to be addressed by a consumer commission like that of the Australian Competition and Consumer Commission?
And what led to this BOOM in house prices, and a whole Cohort of Australians being locked out of the market?
In the late 1990s the Howard Government introduced Temporary Visas
for foreign workers which undercut wages for our people!
Prior to the Pandemic there were 2.3 MILLION Temporary Visa Holders in Australia! They were lured by an opportunity to invest in property and education to gain ‘Permanent Residency’ …
Compare this to the prior annual 70,000 permanent migrants intake!
In addition to this high immigration, Mr de Mello from the Economics Department of the OECD, also said that restrictive regulations of land use and zoning in our major cities contributed to the supply of new housing failing to meet this demand from high population growth.
Mr de Mello, who is not from here, can be forgiven for being unaware of how in Sydney we have already lost most of our ‘Green Belt’ mid 20th
Century due to landbanking and redevelopment by developers!
But why do the RBA, Commonwealth and NSW Productivity Commissions call
out planning restrictions when they are in full knowledge of the loss of our
Green Belt, and how it came about?
‘Gradually the Cumberland County Council was forced to release more and more land in the Green Belt during the 1950s until it was abolished in 1963 and replaced by a state planning authority.’
“What happened to Sydney’s Green Belt? The bush to the west of Sydney in the Cumberland district was to be protected from suburbia,” was the question!
And indeed ‘Migration matters’to the developer lobby, the Urban Taskforce!
Extract from the first edition of ‘Urban Ideas’
‘What is now needed is a planning policy that drives the development of up to 10,000 well designed apartment buildings, in appropriate locations in metropolitan Sydney, over the next 25 to 30 years.
The Urban Taskforce supports the growth of Sydney as outlined in the Metropolitan Strategy. In fact, we believe that the growth could be higher than the governments predictions, if immigration levels are maintained.
We also understand that the community has concerns about the change of character that will flow from a move to a more urban environment. But somehow the extra 770,000 new housing units will need to go somewhere so we are demonstrating one approach towards this.’
DESPITE the fact that we are still part way through the COVID-19 PANDEMIC with its spread across the globe particularly in high density cities, this mob persist with plans for ever more high density high-rise!
AND here in Sydney and Melbourne due to lock-downs thousands of Australians in 2020 and 2021 moved out of apartments seeking the
freedoms of living in detached housing, and moved to the regions to seek more affordable housing!
WHY should we in Australia ‘have to get outa the way for a more urban environment to benefit developers and foreign buyers’?
Australians largely live on the narrow coastal strip of the east coast for good reason … because Australia at its heart is desert country with mountain ranges. Australia experiences severe thunderstorms, droughts, heat waves, occasional floods and frequent bushfires!
There is a shortage of affordable housing for Australians, and even more locked out now with prices escalating in 2021!
Australians, it would seem obvious, need to lobby their politicians for a STOP to Political Donations of which the Liberal Coalition gets the lion’s share from developer groups!
And to lobby for a return to sustainable permanent migration of 70,000 per annum or less!
THE WAY out of this problem is to build affordable housing for Australians … to stop with the high immigration and return to the permanent
sustainable migration system of 70,000 per annum … or less!
WHEN WE LOOKED AT NEWS VIDEOS OF THE MAGUIRE ICAC HEARING …
The reports we had seen on the news only featured Scott Robertson ICAC Assisting Counsel, examining.
However the camera then crossed to Arthur Moses SC seated there, and we were wondering what role he had in this inquiry?
We now see that Arthur Moses SC was there representing Gladys Berejiklian!
This is interesting … what a tangled web of property developers, real estate gatekeepers, the Law Council of Australia and MPs … because back in February 2019 a report appeared in the Australian Financial Review that REAL ESTATE AGENTS with the backing of the LAW COUNCIL OF AUSTRALIA were able to weasel their way out of the Anti-Money Laundering legislation allegedly on the basis that imposing the full AML/CTF (the second tranche of the AML Laws) may create conflicts with the lawyer’s duty of confidentiality, and the principle of client professional privilege!
‘President of the Law Council of Australia Arthur Moses, SC, said their profession was already extensively regulated by the states and territories under a comprehensive and robust regulatory system.
The Law Council is concerned that imposing the full AML/CTF regulatory regime may create conflicts with the lawyer’s duty of confidentiality and the principle of client professional privilege, as well as increasing the cost of legal services to the community,’ he said.
At the time CAAN asked these questions …
WHY is it with the purchase of real estate there should be some difference compared to buying or selling a vehicle, why is it different?
Why is it difficult to apply laws to the purchase of real estate?
Why is that compromising a lawyer?
Why should real estate be any different to any other matter?
If there are laws governing real estate so be it. It should not make any difference to a lawyer. If lawyers have a matter before them that involves a crime they have two choices:
-do it for their client knowing their risk
-not do it
View: ‘Labor to Target Lawyers, Accountants, Real Estate Agents’
TODAY we got a tipoff about an article in ‘The Australian’ Business section ‘Foreign Buyer Drought hits Units’
… online it is under the headline:
Covid squeezes apartment pipeline as foreign investors stay home
The report opens with ‘Chinese residential property investment shrunk to the lowest levels in seven years during the Pandemic causing the supply of pipeline of apartments to dwindle over the coming years’.
What does that say?
It says, as we know, that the pipeline of apartments are built for the Chinese market.
How did this come about? The Foreign Investment Review Board ruling that allows developers to sell 100% of ‘new homes’ to overseas buyers … and a whole raft of temporary visas facilitating them to fly in and buy, or online through Juwai, or through an onshore Proxy!
This ruling is still current as with the second tranche of the Anti-Money Laundering Laws through which the Morrison Government exempted the Real Estate Gatekeepers in October 2018!DESPITE a whole Cohort of Australians notably those aged under 35 being locked out of home ownership this lot want Chinese buyers to return*!
As reported today in the Sydney Morning Herald, ‘Soaring House Prices: an economic threat eating away the Future’ and making our national economy less stable and lowering productivity. It was the huge influx of Chinese buyers that also escalated house prices esp. between 2015 and 2017!
And now with 60% of First Home Buyers funded by Parents or Grandparents, low interest rates, subsidies of Government grants house prices have again escalated locking out those who have not got wealthy parents.
In 2014 developers spent $11.3Bn; in 2019 $5.03Bn; in 2020 $4Bn on residential sites. Overseas buying fell to less than $.5Bn which still represents a loss of housing for Australians …
Apartment developers so addicted to this foreign buyer market that they are concerned that only 86,400 new apartments are planned for across Sydney, Melbourne, Brisbane, the Gold Coast, and Perth up to 2024
It would appear following the ‘towers cracking up’ followed by the Pandemic that many have moved out of high-rise apartments seeking the space and freedom of a house and garden which has prompted developers to shift to building
boutique apartments given low rates and a housing shortage.
The developer lobby group, the Property Council of Australia (for which Scott Morrison, the PM wrote the policy prior to entering politics) has called for all our State Governments to stimulate this sector! By reducing international investor surcharges, and improvements in planning processes!
Chief Executive Ken Morrison proposed that 30,000 jobs could be at risk across Australia, and that apartment construction was a ‘critical component of Australia’s future housing supply and a vital job creator for our economy.’
Never mind that currently there is a shortage of building materials much of which are imported, that project home developments have become more expensive due to this shortage and trades being in short supply (due to the demise of TAFE), and that aspiring home owners prefer to buy these house and land packages!And what of the shortage of trades to do home maintenance projects across our suburbs?
Morrison submits that unless policy changes are made that the apartment building sector will lose 30,000 jobs and produce $5.9Bn less in housing over the next four years.
And that inevitably immigration would return!This is despite all the media today raising concerns about those Australians aged under 35 being locked out of home ownership!
Morrison submits that international buyers and Build-to-Rent investors will be key to new projects along with planning and stamp duty * relief.
It would seem that due to this sector previously seeking cheaper building supplies esp. from China that the Pandemic had led to shortages and price increases for end users!
PLEASE SHARE THIS WITH OTHERS!
SEND your OBJECTIONS TO LOCAL MPs for restoration of the housing development market for Australians!
TONIGHT, 14 JUNE 2021 view the video, and skip along to about 47.52 minutes, and JULIA BAIRD introduced the topic of Housing Affordability.
‘Now most Australians grew up being taught that if they worked hard, saved money, cut down on the avocado toast, that one day they would be able to buy a house, but new research shows that this dream is out of reach for our younger generations.
The Australia Talks National Survey found 65% of participants agreed that for most young people owning a house just isn’t an option … ‘
CAAN particularly looks at the conversation with Nicki Hutley, economics consultant for Social Outcomes and the Climate Council.
JB: How are we to read this Nicki?
Nicki Hutley: It’s hardly surprising we have had a housing crisis in this country probably for two decades, and all levels of government hold responsibility for this. It is around local government planning, it’s around state government planning and legislation …
KEY POINTS FROM NICKI HUTLEY:
-to make housing more affordable for more people by extension that means that ‘housing is potentially going to go down in price’
-many Australians hold a lot of their wealth in housing
-the economic consequences of the wealth effect when house prices go down it flows through the economy; a very delicately balanced issue
When we look at the drivers::
-a whole host of issues including self-interest and nimbyism
Host Julia Baird then raised the issue of how expensive the housing market is becoming here.
JB: This is a two-bedroom house in Sydney’s inner-city suburb of Darlinghurst; a 90 sq metre block; a buyers guide of $1.7M. … It would be more than a lick of paint to be liveable. How can this be sustainable? The prices going so far up year upon year especially since the Pandemic.
NH: it is certainly not sustainable. I would have thought we already got to that point.
… but what recent research tells us:
-wealthy boomers are helping their kids out now; an intergenerational transfer of wealth from older Australians to help their kids get into the market
–60% of first home buyers are getting support from parents or grandparents to the tune of an average of $93,000
-whereas a normal average couple on an average income it would take them a decadeto save for the deposit
-the big issue, interest rates are incredibly low; those who already own property it is much easier to access the finance to then dab more in investment properties
-we are creating this cycle where we have got more and more of the haves concentrating, and then this group that are being shut out of the market
JB: We have seen the political will in New Zealand to tackle a very heated market to crack down on investor buyers over people who want a roof over their head. Every time we talk about capital gains and negative gearing – that every time we do it ends in a bog. What is going to happen here?
Which levers will be pulled?
NH: There are some short term and long term things. To actually properly address housing affordability without having a double collapse in the economy there are things we can do in the short term:
–get rid of Negative Gearing and Capital Gains Tax * to bring down prices *
.it wont be catastrophic; there are always some winners and losers; the losers will be very vocal
CAAN: Can anyone recall if this was raised on ‘The Drum’ during 2019 in the leadup to the election? When Bill Shorten announced that if elected Labor would grandfather negative gearing and address capital gains tax?
House prices have been escalating since the early 2000s, and again particularly during 2015 and 2017! (due to the high temporary migration visas inviting investment in our housing).
NH Points cont’d:
-a lot of costs are driven by ‘supply and demand’ and the cost of land
-and also government charges; dealing with infrastructure charges particularly in new areas you can be slammed
-those who live in more central parts of Sydney have all the infrastructure paid out of general revenue
-regionalisation policies need to be looked at more carefully
–latest intergenerational report that the Sydney population will increase to 11 million in 4 decades *
CAAN: Whose side are our Liberal Coalition Governments on?
WHY do we have to have 11 million people living in Sydney when at some 5.5 million we have a shortage of affordable housing, and sit in gridlock? Our infrastructure is inadequate! And much of our heritage and urban bushlands have been bulldozed!
Perhaps this is explained with the ‘integenerational report’ being written for the Berejiklian Government, and whose interests does it serve?
WHY not build housing for the incumbents? Those who sold in 2020 have also been locked out by the price hike of January 2021!! And continuing …
Alexander Downer agreed with Nicki Hutley.
KEY POINTS FROM ALEXANDER DOWNER:
–interest rates are at record lows which inevitably pushes up prices
–government subsidies for First Home Buyerspush up housing prices
-unless you push up the supply – it’s a phenomenon at the moment everywhere in the US, the UK, and so on.
WHEN surveyed 35 per cent of Australians respond our population is getting too big for the country to handle! Can this be solved by building dense cities better?
THIS Australia Talks National Survey report, 2021 opens ‘Australia is one of the least densely populated nations in the world’.
HOWEVER what is overlooked is the fact that most people in Australia live on the coastal fringes because this continent is the driest continent on Earth! It is largely desert country.
AND there have been numerous media reports of Australians having now fled from SYDNEY and MELBOURNE because they no longer found these cities to be so ‘liveable’ …
Our population growth has not been natural but contrived through high immigration of temporary Visa Holders seeking work, or the opportunity to buy homes to gain ‘Permanent Residency.’
(visa workers have been sought after by many employers as they accept low wages. lesser working conditions and payment ‘cash in hand’ to retain their Visas!)
This competition for our housing has locked out a Whole Cohort of Australians as these wealthy overseas buyers outbid them at auctions, and prices escalated!
Our schools, hospitals, roads, trains and buses are ‘all full-up’!
THIS Ponzi Scheme has filled the coffers of developers, toll road makers, retailers …
WHY should we now have to pay more for less?
In every direction we now have higher density, and our urban bushlands, fauna and flora, our Heritage, and our amenity are disappearing …
WHY do we need double our population by 2066?
Apart from making the Property Titans wealthier? And enabling wealthy HNW to launder black money in our real estate and gain ‘Permanent Residency’ …
Perhaps if we returned to a sustainable permanent migration of 70,000 p.a. that may ease the situation and allow for Prof Giles-corti’s recommendation that rather than apartments, a mix of concentrated well-designed housing to create ‘delightful, liveable density’?
Australians think our population is getting too big but can we build better dense cities
High Temporary Migration by Visa Manipulation to buy Australia’s real estate to gain a Permanent Residency Visa … was the means by which the Property Titans ensured their coffers overflowed!
However, despite the closure of Australia’s International Border with the Pandemic this was again sorted by online purchase through Juwai.com or an onshore Proxy allowing foreign buyers to lay-by their homes …
And now the Property Sector, it appears, has again manipulated through an inadequate housing supply … the return of Expats, low interest rates and First Home Buyer Grants to generate a ten year price hike in a matter of weeks from December 2020 to January 2021 of as much as $200,000 or $300,000!
HOUSING HOWEVER IS ABOUT SHELTER … AND THIS PREDICAMENT MUST BE SOLVED AS SUMMED UP BY A CAAN COMMENTATOR!
THIS will never be solved unless we put in place the right policy tools.
HOUSING is a matter of paying the average Australian enough money to afford a ‘HOME’ without bankrupting all the rest of a family’s needs.
In other words, either you bring down the cost of HOUSING, lower rents and/or lower mortgage payments … more importantly lower HOUSING prices, or you raise the wages and salaries so that they can afford them.
One basic test of the CAPITALIST system we live in is, has it solved that problem????
…. Does the system of CAPITALISM … tool for the ability to produce GREED …. for example, give on the one hand enough wages and salaries, and on the other hand enough units of housing at affordable prices to allow people who need housing to buy their HOMES?
AND (NOT INVESTMENTS) HOMES without spending more than 20% – 30% of their income, and the answer is a RESOUNDING NO!!!!
… CAPITALISM has not done that for millions and millions, and it hasn’t done it for years and years
…. and it doesn’t look like it’s going to be doing it anytime soon.
That’s not a failure of a particular housing industry or the salary worker here or there, it is a FAILURE of the system not to have solved the obvious problem, either bring down the cost and price of housing, or raise the incomes of the people who need them otherwise you will see this CRISIS worsen, and the image of the ‘Homeless’ and down and outs become a part of what defines us here in Australia.
There are a few factors at play not just wages …..
….. NEGATIVE GEARING …. is the other BIG thing that has impacted us … the other great CAPITALIST TOOL that needs to be URGENTLY addressed …. BIG TOPIC … for another day!
Could those who loudly complain about the effect of low interest rates on house prices please clarify what they think. Do they really believe that living standards would be better with higher unemployment, lower inflation and higher mortgage rates? Why?
I would re-frame the question to how to make housing affordable while containing inflation, minimising unemployment and maintaining living standards. “Living standards” to factor in wages, size of homes, tenants’ rights, adequacy of services, commute times and congestion.
Agree! And For those who sold in 2020 faced w v limited supply Fr Dec 2020 to Jan 2021 price hike $300,000 equiv 2 10 years incrs meant priced out across much of Sydney competition fr those rejecting defect units Prices cont 2 rise
Your question implies an answer already. Let me do the same. Those who loudly advocate for QE, could you please explain how saddling future generations with debt, creating financial vulnerabilities and inequality justifies the decimal point impact to unmp rate?
If low interest rates were driving demand for bank credit for productive purposes there would be few complaints. The problem you have is that the ideology of deregulated bank credit (money) creation has been blowing unproductive asset bubbles and not much else for 20+ years. 2/3
Nice way to set up a completely false dichotomy, eh? Note also presumptive positioning of inflation as a good thing, (ie “lower inflation” is somehow a threat). Land is a factor of production. Would make sense to squash the price. Like we do wages.
I want tighter access to credit. I want private housing investment incentives removed. I want restrictions on the number of housing investments one can have. I want to raise the UI rate to #80aDay and remove mutual obligations. I want a voluntary Job Guarantee to be created.
Of course not but is macropru being used aggressively enough to offset the effect on house prices from low interest rates? The disconnect between wages and house prices suggests not. Is it ideal for so much capital to be channeled into housing?
The fear of recession is partially how we got into this mess. Too much excess, crowding of employment, inter-generational wealth inequality, mal-investment & over-leveraging into unproductive assets, unjust tax breaks, over-weight banking sector into RMLs & no room to move IRs.
What if you think low rates are at best a bandaid fix for fx appreciation and that monetary policy is a poor way to target employment and living standards if it’s main transmission is to just let more housing be built instead of investment.
Only issue with super low interest rates is the only way is up. meaning people won’t be able to service the loans when interest rates go up even 0.5%. This would cause a glut. Oz won’t have any control in interest rates as banks borrow most of their costs from overseas.
Living standards are best when we have average stable interest rates. As John Howard once said that’s 7%. Failure to manage our economy from the liberals are going to see pain from the people in the future no matter who the government is….
We have built a system where housing is used for wealth creation and not for housing. Picking out one small part of a big problem and acting like people are saying its the whole problem is disingenuous. Letting wealth inequality run rampant will have consequences.
My neighbour across the road bought $2k in cryptos and “made” $800 overnight. He was rapt. All I could think was “you gained, with zero contribution to society”. Meanwhile, the minimum wage worker is put at risk during covid.
We are witnessing a generation of “geriatric first home buyers” (I’m coining that term right now). Home buyers that are locked out until mid-late thirties. They are guaranteed to be paying mortgage entire working life and probably into retirement. They have no funds left for 1/2
depends who you talk to. Those trying to save for a house are spending less because of low rates. Those who just borrowed too much because of high house prices are not overly enjoying life. Retirees trying to live off low rates are struggling. Rich are richer. Most are worse off
Clarify? There can never be enough “clarity” for those obsessives who are still insisting that a public monetary system built around a private bank monopoly on accounts at the RBA is NOT the problem. 1/2
Spoken like a true Keynesian. How about the obscene mis-allocation of capital to non-productive (ok, at best temp. in nature) investment. The behaviour these policies create will have neg impacts for decades and will be another central bankers problem, and that’s the problem.
A useful discussion would inspect history or other nations & identify when / where nations have gotten housing right & why. My impression is government has a role in creating affordable housing & the best source of revenue for that role is likely be housing rent / speculation.
Ok boomer. You look old enough to remember the 90s when interest rates were at 13% with a lower population, lower house prices, lower household debt to GDP and lower unemployment. Low interest rates have had the opposite effect. Now people will retire with mortgages.
CAAN: Actually interest rates rose to 18% in the 90s and some also lost their homes then too!
Truly sad that a person with your background speaks like this. You won’t acknowledge the extraordinary market price distortions today and massively inflated prices across asset classes including housing? And ever widening wealth gap? Always leads to crashes which hurt the poor.
is so full of academic bullshit, so disconnected from the reality of people struggling to find affordable stable housing for their families. So clueless not to acknowledge that the major reason for housing unaffordability is low interest rates, lax lending standard
False dichotomy. Aren’t living standards better associated with productivity? IR up/down tends re-allocate/transfer/concentrate resources/wealth. Lowering IR concentrates wealth to existing assets (top %). Increase productivity tends to benefits all including bottom %.
Encouraging people to buy things they can’t afford is dangerous and simply kicking the can down the road. The younger generations will have to work to the grave. All for the benefit of rich baby boomers who are merely pushing back on the inevitable credit crunch.
Higher house prices with higher debt levels on lower interest rates and relaxed lending laws = lower mortgage payments. Let’s reverse that. House prices slow down or drop, interest rates move up = mortgage payments increase. Higher costs = impacts living standards
Why would higher interest rates lead to higher unemployment? Why would higher interest rates lead to lower inflation? The last decade and a half have shown the opposite happens. Your view of the cause and effect of this is anchored in the dismal science of the 1970s.
I’ll make you a deal – make the CPI an measure of things people put actual money into (housing especially but also equities) and see where that gets us. Right now the measure of inflation is a lever to supercharge inequality by making money cheap for speculation.
I think that you are mistakenly forcing a binary outcome where you are in hindsight, resulting the recent past as though there is no other option. The mere fact that you cannot raise rates without causing hardship proves lowering interest rates this low was an error in policy