INITIALLY we balked at Jessica Irvine’s suggestion that:
‘ … we used to point the finger at immigrants for causing spiralling property prices, but then we shut the borders for over a year and prices still rose 16 per cent nationally – the fastest rise in at least a quarter of a century? Yeah, me too.’
This she wrote in her article, ‘We need a Top-Level Inquiry into runaway home prices – and Ken Henry’s up for it!’
However, a hurdle not talked about here is that we have ‘a PM for PROPERTY’ … as a former staffer he wrote the policy for the developer lobby group: The Property Council of Australia … and it appears government policies favour deve-lopers somewhat! Our borders were allegedly closed, but not for 15,000 wealthy foreigners given Australian Visas!
AND who would Coalition MP Jason Falinski be representing with an inquiry into housing supply? Cough … cough …
JF: “Everyone focuses on negative gearing and capital gains tax, but the 800-pound gorilla in the room is supply.”
On the demand side, a common belief in the power of government to step in and change the size and shape of demand for housing, by changing TAX RULES (i.e. Tax Benefits for investors) and (sometimes) curbing immigration.
-with supply inelastic: the time it takes to build new stock
-demand everyone needs a place to live
Q. Why has Home Ownership for those aged under 35 halved since 1995?
A. John Howard was Prime Minister between 11 March 1996 and 3 December 2007 during which terms permanent migration of 70,000 p.a. was replaced with temporary migration of Visa holders lured by investment in education and real estate to gain ‘flexible citizenship’ particularly Middle Class Chinese; as our real estate became awash with ‘Black Money’, and property prices escalated with a boom in 2004!
Temporary migration numbered hundreds of thousands of people. Prior to the Pandemic there were 2.3 MILLION Visa holders in Australia of which 1.6 MILLION were Visa workers! Many seeking and gaining ‘Permanent Residency’!
At the same time Australians including Millennials (Gen Y) have endured the lowest wages growth!
In a paper titled Housing: Taming the Elephant in the Economy, among the list of demands from those on the Demand side:
*an expansion of the Reserve Bank’s mandate to include “maintaining a more price stable and well-functioning housing market.
AND Hal Pawson a demand-side academic suggested a high-level Treasury review of the ilk of the Ken Henry Tax Review! Independent of the Government!
Jessica Irvine: ‘So, I texted Henry to see if he’s up for it. He replied:
“Jess. Sure. I’d chair such a review. The question is whether we have a government with the courage to commission it. Ken.”
Jessica concluded: ‘Call it an elephant, or call it a gorilla, what’s crystal-clear is that Australia’s growing housing affordability crisis is wreaking havoc on the quality of life of all Australians and it needs to be stopped.’
READ MORE! ‘We need a top-level Inquiry into Runaway Home Prices and Ken Henry’s up for it’