Some officials from Treasury, and the RBA fronted a parliamentary committee which is looking at this mess made for Millennials who are …
… less likely to own a home than at any time since 1947
In the early 1990s the cost of a house to income earnt was 2.5 times … now it is more than 6 times (and that’s for a flat) …
Then in the late 1990s the Howard Government introduced Tax Benefits of negative gearing and the capital gains tax for investors …
Now with the very low interest rates, buyers are borrowing many more times their annual salary … fuelling the price hike!
Labor Committee member Matt Thistlethwaite rejected that the Morrison government’s schemes helped people get over the threshold of the deposit because these schemes increased the demand and prices to benefit the property sector
In June 2021 quarter prices rose 6.7%!
Thus the Morrison Government housing policies are designed to cramp supply and escalate demand … so what a surprise housing has become more unaffordable!
The Treasury Rep conceded that changes to stamp duty, and reforming zoning and planning laws could improve affordability but only marginally …
Independent Economist Saul Eslake said the key was increasing the housing stock starting with social housing, and removing the Federal Government schemes (stimulus).
-by eliminating the cash grants to home buyers that benefit the property sector
-and the tax benefits (neg gearing and CGT) that cast adrift (lock out) First Home Buyers
The RBA made it very clear that the high population growth from 2005 spiked house prices
And now the low interest rates were key!
And young people are also hindered by insecure work!
The RBA Governor on Tuesday 14 September allayed fears for borrowers because interest rates would not rise before 2024. And that the bank is watching over lending standards …
THAT appears to be as far as the Governor can go … and what needs to happen is for the Morrison government to implement … at the very minimum … grandfathering Negative Gearing … yes, you B……s!
READ MORE FROM THIS REPORT OF DAVID TAYLOR!
‘We’re back to record property price growth, so what’s being done about it?’