FROM DATELINE … What has Robbed New Zealanders of the Dream?

DRAFT

Dateline

Season 2020 Episode 5  — What Happened To The New Zealand Dream?

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New Zealand is in the grip of a housing crisis. Dateline meets the struggling families living in one of the world’s most unaffordable cities, and the man helping the homeless become home owners.

AND THEN SOME …

HOW has New Zealand a progressive egalitarian place where left leaning Australians looked across the Tasman with envy … with a young feminist Leader with a social conscience who came to power promising kindness and compassion … so you might be surprised to learn that inequality is rife.

WHAT is impeding the Adern Government from fulfilling their promises?

The average house in Auckland now costs over a Million, and the average rent is almost $600 a week

The New Zealand Housing Crisis is pushing those most vulnerable into a desperate situation.

The fallout from the CoronaVirus Pandemic only worsens the situation.

With a leader who talked about compassion which is now only rhetoric when on the ground there are families seeking emergency care from New Zealand’s welfare system.

The team are on the frontline of the Housing Crisis – a volunteer organisation operating in Auckland for 10 years now.

The majority of the people they work with have been squeezed out of the rental market; they can barely afford the weekly rent or maybe homeless!

Auckland has become one of the most unaffordable cities in the World ranked behind Sydney and Melbourne.

Families like these (as shown) can’t afford to buy food! On the minimum wage housing costs 70% of their income. When prompted by the Advocate they reply that after paying for rent and bills they only have $100 a week left.

People on benefits can get an emergency grant but these need to be repaid creating a debt trap!

The worker interviewed has had personal experience of homelessness! She said:

‘I have been homeless in the past; stayed in my car for two weeks until I got into a boarding house.’ She was asked what was that like and replied:’It didn’t feel good; it wasn’t a safe environment to be in being homeless. It’s not a safe place to be at all.’

Vulnerable families are struggling to keep a roof over their head with thousands of households on the waiting list for public housing. With 8000 homeless going without a safe place to call home!

Yesterday this man was facing a night on the streets. AAAP helped him access emergency housing.

The government has just agreed to increase benefits by $25 a week as part of its Covid 19 support package but last year it ignored an expert report recommending the benefit be increased by almost 50%.

Thousands of people are homeless. One of Labor’s policies is fixing the Housing Crisis. To build 100,000 homes over 10 years; the government promised affordable housing.

But there were problems from the start.

The government fulfilled their promise *** by stopping foreigners from buying existing homes.

70% of the homeless population live in overcroweded houses. They are called the invisible homeless people camping out or living rooms of relatives ***

Eight people squeezed into a small public house with mum and dad forced to sleep in the lounge.

During the CoronaVirus Pandemic overcrowding will pose a serious risk to public health. There is little hope of a short term fix.

These people have been on a waiting list for a bigger home for three years. One of the boys has a dream to own a house. He said ‘it would feel like you could bring your family over if you want. You don’t have to hide – this is your own property you own that you can do it.’

But home ownership has been declining in New Zealand for years. Where the Landlord is King.

An investor/landlord was interviewed; his plan is to buy a house each year so that he has sufficient income to do what he wants. He said any successful landlord does not get rid of a tenant unless he has a really good reason.

He then indicated the homes that he owns; five homes on the one block.

He wants to make a good living off the rental income; he does everything himself. (maintenance)

His tenants stay a lot longer than they used to with less options probably more difficult for them to find another property.

One of his tenants said she used to rent a garage for $450 a week to live in before moving to this house. ‘We were desperate at the time – nobody would take us on; that was about a year ago; stayed there for

about two years.

Four living in a garage must have been cold in Winter? She described every time it rained water would come through.

In response to the CoronaVirus the government has announced a rent freeze but before the Pandemic some landlords were taking advantage of the Housing Crisis.

But ‘Peter’ has a Plan to help tenants gain more rental security offering a ten year lease.

It is giving tenants the room to do what they want to do with their home.

The landlord would provide the shell of the building; the tenants would rent the property and provide their own flooring, light fittings etc; the model in place in Germany and Scandinavia.

He said ‘that is an option I would like to see and I think it would make a difference to the housing market. My tenants are secure now …. when I die they are going to be looking for a new home, but there is little political ….

for any significant reforms to the housing market.’

The winners are the people already on the property ladder. For young people the crisis will play out for years to come!

New Zealanders without home ownership – it is seen as something that makes you an adult. When you don’t you have a sense of being disconnected; of not achieving of being a failure.

The man who mortgaged his own home to find a unique solution for families ….

New Zealand housing ciris

moving here for affordable housing … a … town in one of the country’s most depressed regions and ……………………….where 60% moved in the rural areas and moved out of the cities.

The reversal of the 60s urban drift where60% moved to the rural areas and moved out of the cities

The reversal in the 2000s now plroviding rentals available so many of the families are living in makeshift cabins, buses …. to living in overcrowded conditions.

This is the gateway into property….

The Maori community leader mortgaged his own house to buy this land in the hope to give the community a new lease on life.

He then found abandoned derelict public houses in Auckland and trucked them up here, and created a little suburb where there were farmlands. They had been sitting in Auckland ***

He

Ricky has an unconventional plan for addressing the housing crisis.

The first step involves ………….. homes and making them habitable again.

Ricky said: ‘You have to be able to see the goodness in everything.’

Oodoo got a house from the Trust. …

he has given us a home; put a roof over our heads, and I’m very grateful for that.

The second step of Ricky’s Plan involves housing families but it’s about more than just putting the roof over their heads.

Ultimately the ….. is to take people who are homeless turn them into home owners over 14 years.

Families pay $275 a week

Most of which goes to paying 160

cost of ….

turns around a historic decline in Maori home ownership from …..

dependence yhousing in ….

We were living from house to house with out suitcases Leon and OOdoo originally from Papua New Guinea tried making it in Australia but came back when it didn’t work out.

When they returned there was a lack of rentals …. with two kids in toe.

Nobody wanted to rent to a couple with two and three children. They appolied for social accommodation that links

NGO and she put us down on a waiting list and asked us what we were going to do if we didn’t have anywhere to go, and I told her we would go and live in a tent with our kids =.

They were provided emergency accommodation, and the opportunity to join the home ownership program

WHAT it appears this excellent program has not considered … sadly it looks like because the Ardern Government has not been able to honour all its promises, and may not be returned … that New Zealanders may well return a conservative Government that helped create this predicament in the first place with their policies!

It was during their term that the visa holder money launderers bought up New Zealand domestic housing, and house prices consequently escalated with the high competition

VIEW:

https://www.sbs.com.au/ondemand/video/1709195843583/dateline-what-happened-to-the-new-zealand-dream

DEVELOPERs COURT Rules Against Northern Beaches Council and Community for $5M Frenchs Forest Boarding House

An article has appeared in ‘The Manly Daily’, ‘Developer wins battle against Northern Beaches Council for $5M Frenchs Forest Boarding House’ https://www.dailytelegraph.com.au/newslocal/manly-daily/developer-wins-battle-against-northern-beaches-council-for-5m-frenchs-forest-boarding-house/news-story/0f26043254beaf46e46df21063836d12

SO we talk about what we know, and what’s in it for the Property Sector …

A proposal for a $5M boarding house labelled as a “new generation boarding house” … that looks like a commercial building has been approved after a long legal battle with Northern Beaches Council.

The Land and Environment Court is perhaps known as ‘the developers court’ for good reason … because despite more than 100 submissions the developer has been granted approval by this court.

‘The project called ‘The Beehive’ looks to promote “affordable housing in a desirable location” and has been designed as “key worker housing” for Northern Beaches Hospital — with it just 600m from the health facility at 10 Naree Rd.

It would include the demolition of existing structures on the site, trees and the construction of a three-storey, 27-bedroom complex with parking for 11 cars, five motorcycles and five bicycles.

The plans incorporate accessible rooms, accommodation for an on-site manager and each room comes with its own bathroom and kitchen facilities with an additional communal kitchen, living room and private open space. It would accommodate a maximum of 50 people.

The original proposal was for 39 rooms with 16 parking spaces.

SO the local residents objected because this proposal would rob them of what they have paid for! The amenity of a low-rise low-density bushland suburb, and in an area already subjected to inadequate parking. Why would they accept a bulky boarding house in their midst? That is not in character with the area to adversely impact neighbours on all sides!

How did we get here? How come the best on offer for ‘Key Workers’ are boarding houses? AND an afterthought following the opening of the Northern Beaches Hospital …

Not a home of their own … how come? With the only option to find a home 60 – 80 Kms from the CBD/ their workplace or a boarding house near where they work?

IS this because NSW INC policies have been written by the ‘deve-loper Family’ … The Mob? So they market their dwellings 100% overseas, and ‘hot money’ is awash in Australian real estate?

HOW come our beautiful middle ring bushland suburbs are being bulldozed?

WHO instigated this? Was it HT … the Concrete Kings … their lobby groups ?

View: https://caanhousinginequalitywithaussieslockedout.com/2020/02/16/22956/

The benevolent developer applicant in this matter, Michael Williamson, made a public submission:

“Unlike other hospitals, Frenchs Forest hospital has very limited accommodation and public transport options in proximity to the hospital,”

“The proposed development will provide much-needed affordable rental housing in close proximity to the hospital and will therefore help reduce traffic in the area as well as reliance on cars and public transport as hospital and shopping centre staff will be able to walk to work.

FURTHER … THE SPIN …

‘The proposed development also fits in well with the local character and has been carefully designed to respect the privacy and amenity of the adjoining properties.”

DESPITE its size of three-storeys, a bulky 27-bedroom complex with parking for 11 cars, five motorcycles and five bicycles … that compliments the local character of bungalows and two-storey cottages … yeah …

Then he reckons it is compliant … namely because of the Sting of ‘Exempt and Complying Development’ that has done away with the D.A. And in the public interest with ‘Key Workers’ housed in boarding houses that cost them $400 to $450 per week in rent … locking them out of the Housing Market!

Prior to this … a boarding house site approval at 26 Frenchs Forest Rd East, Frenchs Forest …

AND another boarding house on the market has been built and is leasing out rooms at 130 Frenchs Forest Road, Frenchs Forest.

Boarding house development at 130 Frenchs Forest Road West, Frenchs Forest. Picture: Google Streetview
Boarding house development at 130 Frenchs Forest Road West, Frenchs Forest. Picture: Google Streetview

HOW convenient for developers when there is no hotel in the Northern Beaches Hospital area to capture relatives of hospital patients, doctors working long shifts, and aspiring Australian First Home Buyers living in studio accommodation.

YET their ‘Key Worker Parents’ were able to save a deposit for a mortgage … hm … is that now the ‘trickle down effect’?

PLEASE SHARE TO LET OTHERS KNOW … a ‘Boarding House’ maybe coming for where they live …

SEARCH CAAN WEBSITE TO FIND MORE ABOUT

-the FIRB Ruling allowing developers to sell new homes 100% overseas

-visa manipulation …

-the Morrison Government exempted the Real Estate Gatekeepers from Anti-money Laundering Laws in October 2018

https://caanhousinginequalitywithaussieslockedout.wordpress.com/

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AUSTRALIAN FAMILIES PUSHED OUT TO SYDNEY’s FRINGE

Photo: Oran Park; ABC News: Kevin Nguyen

IT remains the Australian dream, but finding a family home in 2020 means moving to Sydney’s urban fringe and often a killer commute.

HOW did this come about? And just over a couple of decades!

IS it because developers lobbied our governments for an overseas buyer market, high immigration and gained the cooperation back in the late 1990s for Visa Manipulation … whereby Middle Class Chinese gained ‘Flexible Citizenship’ with investment in our Real Estate and Education … and an increasing range of Temporary Visas since facilitating migration through the backdoor with investment to gain a ‘Permanent Resident Visa’?

AND further Rezoning for higher density?

THE CONSEQUENCES of the very long commute and inadequate infrastructure … and the ramifications for these home owners and their families are borne out in this report …

BUT solutions are canvassed … investigated in this ‘Our Bursting Cities’ Report!

BECAUSE if things don’t change, we’re “sleepwalking” our way into a major economic disaster!

https://caanhousinginequalitywithaussieslockedout.com/2020/03/13/our-bursting-cities-part-1-housing-solutions/?fbclid=IwAR1h1DQ0LukR4z3oIqBiZmsybPhhhzDnqyGl-odlnXAsnUNnvnsXBgV5WHw

VIDEO: https://abcmedia.akamaized.net/news/video/202003/20200312_OranParkDrone_high.mp4

VIDEO REPORT: Living on the edge

‘It remains the Australian dream, but finding a family home in 2020 means moving to Sydney’s urban fringe and often a killer commute.

Life in the Olsen household can be chaotic. Kahyla and Matt have six boys, all aged under 13.

Each day, the four who are at school walk home together, have a snack, and then it’s on — footy in the backyard, playing with pets, running amok.

It’s an idyllic life for the young family, who rent a newish, four-bedroom home in Oran Park, in Sydney’s south-west.

But it comes with a major sacrifice.

They’re almost 60km from the CBD, and even further from Matt’s office at Macquarie Park, in the Harbour City’s northern suburbs.’

In the face of huge population growth and a lack of affordable housing, Sydney, like other cities around the country, is spreading outwards.

By 2036, more than 1.5 million people are expected to live in outer south-west areas.’

-Oran Park is at the centre of the expansion; from a population of 200 in 2011 to 12,000 in 2020

-a medium-sized block in Oran Park is 450M2; costs $450,000

-a house and land package for a 4-bedroom home costs between $600,000 and more than $1M

-to live closer to the CBD means a smaller house or an apartment with no backyard; and unaffordable

-Western Sydney is more affordable but comes with a long commute and less opportunity

-Chantelle a hairdresser works from home; her husband a mortgage analyst spends 3 hours a day commuting to the city

-he has cut that back to 2 days a week and started a lawn mowing business to spend more time with his family

-Urbis market report two thirds of Oran Park residents are white-collar workers

-South West Sydney needs more corporate jobs to sustain the population growth

WILL the Western Sydney Airport deliver 200,000 jobs in Western Sydney by 2036? Many doubt it will with AI, robotics …

‘With Oran Park already established, the next housing frontier is 30 minutes further south, at Menangle Park.

Here, livestock still graze on rolling hills turned green by recent rain. It’s one of the last remaining areas in the region that feels like the country.

But it’s slated for a huge housing development.

*So far, Chinese-owned developer Dahua Group has sold only about 200 lots in its estate at Menangle Park, but it wants to build 4,000 homes.

SEARCH CAAN WEBSITE for more reports on DAHUA GROUP AND MENANGLE PARK

‘The area is 70km from the Sydney CBD, and about 60km from Wollongong.

Menangle Park will soon be home to a new housing estate. ABC News: Kathleen Calderwood

VIEW ‘LIVING ON THE EDGE’

https://www.abc.net.au/news/2020-03-15/these-sydney-families-love-their-life-but-it-comes-at-a-cost/12043044

Our bursting cities part 1: housing solutions

Image result for image tram melbourne bursting

Photo: Tram: abc.net.au

Our bursting cities part 1: housing solutions

By Hilary Harper on Life MattersShare

Download Our bursting cities part 1: housing solutions (17.89 MB)Download 17.89 MB

As Australian cities grow at a rapid rate, the people who can no longer afford to live there, get pushed out.

Many of them are what economists call key workers — the teachers, nurses, police, health and emergency workers whose jobs are crucial for the running of our cities.

We know this is bad for the individuals who get pushed out, but researchers say it’s bad for everyone.

Actually, urban planner Professor Peter Phibbs says, if things don’t change, we’re “sleepwalking” our way into a major economic disaster.

So what can be done to turn things around?

Guests:

Dr Somwrita Sarkar, senior lecturer in design and computation, with an interest in city science research, University of Sydney

Professor Peter Phibbs, geographer, planner, social economist and director of the Henry Halloran Trust, University of SydneyDuration: 19min 32secBroadcast: Thu 27 Feb 2020, 9:06am

SHARE THIS WITH YOUR LOCAL MPs and Candidates!  And tell them what you expect from their Party …

Duration: 41 minutes 50 seconds41m

SUMMARY …

AUSTRALIA has one of five fastest growing cities in the World!

WHY is this so? 

When we are not China, India, Indonesia …

MELBOURNE

KEY WORKERS are being squeezed out, and that is bad for all of us!

Where you can afford to live and where you need to be are two very different

places …

HOW BIG are cities getting around the World?

By 2050 there will be 9 BILLION People on the planet with some 68 -70% living in

Cities.

-in 2008 we crossed the landmark with 55/60% of the World’s population living in cities

-Australia is one of the most highly urbanised countries

-a lot to do with changing economic patterns of jobs and services

-driving people inherently to where people conglomerate in large numbers

international migrant program is a significant proportion of our growth

-migrants are attracted to Sydney and Melbourne for employment

a large proportion are international students

-our migration program was ramped up in 2009 because of the GFC

-Melbourne’s growth double that of a lot of other global cities; playing catch up with

transport and infrastructure in Sydney and Melbourne

one of the key findings is that economic growth is not across the board; the extra wealth generated goes to the top income brackets; it is not trickling down!

-a key issue is housing because housing is a basic need, and an economic opportunity *

If you are thinking about housing as an economic opportunity and if you have a lot of people who have the wealth to purchase housing at higher and higher prices you have a situation where you are pushing a lot of people out of the Housing Market

-a moderate income earner whose salary is not good enough to buy a house in the city you want to live in

-the housing market is a huge generator of wealth inequalities

-very sharp reduction in interest rates; phenomenal impact with staggering price of housing

-low and moderate income earners cannot afford to save the deposit

.Australia’s rental properties on World standards are quite expensive

.now looking at 3% interest rates

.doubling the housing prices in the cities

-key workers are struggling to meet the deposit gap for homes close to the city

-teachers and nurses are moving a long way to buy more affordable housing

.with commutes of 2 hours each way to work

.hospitals are struggling to recruit staff because they can’t afford to live anywhere appropriate

.the consequence e.g. intensive care nurses end up working in nursing homes, in general nursing

.problems are emerging now unlike for nurses who bought homes in the early 1990s

-talking about the idea of Poly Centric Cities

.the nature of some jobs is to be concentrated, and the nature of some jobs to be dispersed

.Sydney a traditional city in which a large number commute to the single concentrated hub or a large number to the dispersed areas

.those living on the periphery travel longer to reach concentrated hubs

.if there were more hubs and mixed-use development providing access to a service is also someone else’s job

.a number of different CBDs and hubs rather than a single one; talking of a more efficient structure

.where no-one has to travel beyond 30 or 40 minutes each day to access their job or the service they require

-it comes down to coordination between local government, metropolitan and state level

.with the Greater Sydney Commission (GSC) at the metropolitan level

.the Department of Planning at the state level

.and local government with an incredibly important role concerning social and community infrastructure

LISTEN IN! 

Finally professionals are telling it as it is … not so bluntly as we at CAAN … it’s time obviously for a cut to Immigration and Visa Manipulation!

SOURCE: https://www.abc.net.au/radionational/programs/lifematters/our-bursting-cities-part-1:-housing-solutions/12002300

LIKE CAAN ON FACEBOOK!

https://www.facebook.com/Community-Action-Alliance-for-NSW-744190798994541/?ref=aymt_homepage_panel

SEARCH CAAN WEBSITE FOR EXPERT REPORTS

https://caanhousinginequalitywithaussieslockedout.wordpress.com/

HOUSING MARKET at risk of Renewed Overheating … IMF

IS the CoronaVirus a factor in this with more Temporary Visa holders extending their stay unable to return home?

THAT was suggested, we recall, by Monica Tu … and perhaps explains why housing prices have again escalated with more keen to bid with their ‘hot money’ in Australian homes … the turnaround has been extraordinary considering the prior downturn until towards the end of 2019

FROM the Comments a sensible solution!

What about investment in public housing?
That provides both an economic stimulus via the construction industry and will put a dampner on housing demand and stabilize home prices.
The Problem is: the notion of public housing goes against LNP/IPA blind ideology …

Housing market at risk of ‘renewed overheating’: IMF

Shane Wright
By Shane Wright

View all comments

The nation’s housing market, particularly in Sydney and Melbourne, is at risk of “renewed overheating”, the International Monetary Fund has warned, urging governments to overhaul property taxes including negative gearing.

In its annual review of the Australian economy, compiled before the coronavirus outbreak, the IMF said it expected a continued “gradual” recovery, albeit with several downside risks including the summer’s bushfires.

Since then, the epidemic has forced the IMF, OECD, Reserve Bank and federal Treasury to downgrade their forecasts for the local economy, with most expecting a 0.5 percentage point hit in the March quarter.

The IMF has warned the lift in house prices over recent months was a growing risk to the economy, urging APRA to consider new macro-prudential regulations.
The IMF has warned the lift in house prices over recent months was a growing risk to the economy, urging APRA to consider new macro-prudential regulations.CREDIT:GLENN HUNT

But the fund’s report highlights longer-term issues it believes need to be addressed, including broad tax reform, while urging governments not to tighten their budgets given the possible risks facing the country.

RELATED ARTICLE

Treasury secretary Dr Steven Kennedy said the impacts of coronavirus on the economy would continue through the year.
CORONAVIRUS OUTBREAK

Australian economy to shrink by ‘at least’ 0.5 per cent due to coronavirus: Treasury

While house prices had eased between mid-2017 and mid-2019, there were now signs of a substantial lift, particularly in Sydney where the median price is $1 million and Melbourne where the median is more than $800,000. The IMF said the debt-to-income ratio in both cites was about 40 per cent, making it much more difficult for people to buy a house.

“Still relatively high valuations and elevated household debt warrant careful monitoring of risks,” it said. “Staff estimates indicate that downside risks to Australia’s house prices at the national level have eased after the house price correction, with upside risks beginning to build.”

The IMF said a “renewed overheating” of the housing market was an increasing risk, particularly given low interest rates. Since the report was compiled, official interest rates have been cut to a record low 0.5 per cent, with markets expecting them to fall to 0.25 per cent next month.

According to the IMF, the Australian Prudential Regulation Authority should expand and improve its macro-prudential rules if the housing market takes off. This could include tougher loan-to-valuation ratios or forcing banks to reduce their mortgage exposures in particular parts of the country.

Tax reform should also be used, it said, suggesting the states should ditch stamp duty on housing transfers and replace the lost revenue with a broad land tax. States should also ditch surcharges on foreign purchasers, instead imposing a general surcharge on vacant property or investor-only house transactions.

“Such reforms could be complemented by reducing structural incentives for leveraged investment by households, including limiting negative gearing in residential real estate,” it said.


How Melbourne property prices have changed

See Source Link for Chart for Median House Price and Median Unit Price

The Morrison government has ruled out any changes to negative gearing.

The IMF noted authorities, which include Treasury, had argued tax policy “was not the right tool to address potential speculative behaviour in housing markets” and instead backed macro-prudential regulations.

Shane Wright

Shane is a senior economics correspondent for The Age and The Sydney Morning Herald.

FOMO is back for Sydney First Home Buyers as Prices Rise

FEAR OF MISSING OUT! SO SAD! We saw their glum faces yesterday … among them young professionals competing with buyers from overseas at ‘Open Houses’ across Sydney yesterday … Saturday …

RE Agent says

“There are people who are feeling like they’ve missed the boat or are going to if they don’t purchase straight away. I don’t know where that’s come from.”

NOT MUCH YOU DON’T!

WHAT the real estate sector don’t talk about …

With the corrupt SCUMMO government exemption from Anti-Money Laundering Laws for Real Estate Gatekeepers … inticing your foreign clients to launder their ‘Hot Black Money’ in Australia’s domestic housing … no doubt there is much fear and loathing among aspiring Australian First Home Buyers!

https://caanhousinginequalitywithaussieslockedout.com/2020/02/22/how-did-the-real-estate-gatekeepers-weasel-their-way-out-of-the-second-tranche-of-the-anti-money-laundering-laws/?fbclid=IwAR3FZylMqsZU9KPlRt8bb8Osrn60TTTt9HvuOMTFSO7KCdOtKKCKRAyBmCY

THIS is apart from competing with more Australian FHBs entering the market …

AUSTRALIA … what do you reckon? How much longer do we put up with this B.S.?

VIEW:

TND Ask the Expert on Saving to buy your First Home

https://caanhousinginequalitywithaussieslockedout.com/2020/01/31/tnd-ask-the-expert-on-saving-to-buy-your-first-home/

FHB Scheme Good for Property Sector

https://caanhousinginequalitywithaussieslockedout.com/2020/01/18/fhb-scheme-good-for-property-sector/

Theres just a handful of Sydney suburbs cheap enough to qualify for the Governments first home loan scheme

https://caanhousinginequalitywithaussieslockedout.com/2020/01/03/theres-just-a-handful-of-sydney-suburbs-cheap-enough-to-qualify-for-the-governments-first-home-loan-scheme/

Insiders: Morrison’s FHB deposit subsidy to lift property prices

https://caanhousinginequalitywithaussieslockedout.com/2019/11/12/insiders-morrisons-fhb-deposit-subsidy-to-lift-property-prices/

SEARCH for First Home Buyers Deposit Subsidy to find earlier expert reports

AUSTRALIA … what do you reckon? How much longer do we put up with this B.S.?

What is causing the rapid property price growth? Author Paul Glossop weighs in on why he thinks Australian property price growth is so strong.

‘Fear of missing out’ back for Sydney first-home buyers as prices rise

KATE BURKE JOURNALIST 

First-home buyers are pressing ahead with their dreams of home ownership, rushing to buy in inner and middle-ring suburbs as rapid price growth threatens to push them further out of reach.

The number of first-home buyers jumping into the market and how much they are prepared to borrow has soared in recent months, as Sydney prices continue to rebound.

“There’s definitely a fear of missing out,” said Tom Scarpignato of Belle Property Neutral Bay

“There are people who are feeling like they’ve missed the boat or are going to if they don’t purchase straight away. I don’t know where that’s come from.” ‘

First-home buyer numbers in NSW are at their highest level since 2012

-ABS latest lending figures show

-the average loan size in December was up more than 15 per cent year-on-year

-stamp duty exemptions and concessions for first-home buyers for properties up to $650,000 and $850,0000 respectively; up more than 25 per cent

Sydney first-home buyers quick to take up the federal First Home Loan Deposit Scheme; with as little as a 5 per cent deposit

-about 1100 first-home buyers; more than half are above 30

-in Sydney just over one-third of homes sell under the $700,000 scheme cap

-less than 3500 scheme spots remain; an additional 10,000 to be released from July

-the lower north shore is one of the hardest areas to break into; among a dozen regions where 12 per cent or fewer properties sold under the cap

-Manly and its surrounding suburbs had the least opportunity; with 1.9 per cent of property sales below the cap

-followed by the Baulkham Hills, Pittwater and Leichhardt regions

‘But that’s not stopping first-home buyers getting into such markets, with 70 stamp duty exemptions and concessions granted for the lower north shore over the same period.

The majority, though, have to spend well over the caps, unless they want an unrenovated one-bedroom unit or studios, Mr Scarpignato says, with first-home buyers generally spending from $900,000 right up to $1.6 million, which would secure a two-bedroom apartment or a one-bedroom with parking.

“Even in some of the more expensive areas there are a decent share of units being sold under the cap, but of course that proportion is falling quite rapidly,” said Domain economist Trent Wiltshire.

Almost 30 per cent of apartments sold in inner Sydney were under the cap, as were about one-third of units in and around Marrickville and Botany and half of apartments in the Ryde region and Cronulla area.

However the pool of eligible properties across Sydney would shrink to about 27 per cent of homes if the current rate of price growth continued, Mr Wiltshire said. Add further competition from potential interest rate cuts and another 10,000 scheme spots, and first-home buyers are feeling the pressure to get in.

In the Ashfield area, where almost two-thirds of units are selling below the cap, Jackson Cox of Richard Matthews Real Estate is seeing huge first-home buyer demand, particularly for older units.

“I’m seeing more than double the first-home buyers … than what there was at the end of last year,” he said. “I think that there’s probably quite a bit of urgency.

“They’re really trying to target that $650,000 price point to avoid stamp duty, but will go up to $700,000 if they can,” he said, noting an auction for a two-bedroom unit last week drew four first-home buyers who pushed the price up to $699,000.

Tom Armstrong
Tom Armstrong is among more than 6000 first-home buyers who have qualified for the government’s first-home buyer loan scheme. Photo: Peter Rae

Among them is Tom Armstrong, who has three months to buy with his scheme spot. While “super small” apartments in the city were not completely out of reach, he quickly decided to turn his search to Ashfield and Croydon in the inner west, then further afield to Parramatta to try to get a two-bedroom apartment.

“It’s been pretty full-on, a lot of [the properties] have line-ups at the door, especially the inner west ones,” the 30-year-old said. “I definitely want to get in as soon as possible while there is stuff I like, three months isn’t that long if you’re too picky.”

While most scheme spots nationally were being used to buy houses, Mr Armstrong said that was not viable in Sydney unless you moved really far out.

Mr Wiltshire said the government would likely need to revise price caps next year if it continued with the scheme, but noted this might only put further upward pressure on prices.

“Yes, it will help those people that get to use the scheme, get into the market earlier … but overall it’s not really helping housing affordability because it’s pushing prices up.”

Aris Dendrinos of Richardson & Wrench Hurlstone Park said two-bedroom apartments in the Marrickville area had pushed over the cap in recent months, leaving many first-home buyers disappointed.

“It’s very challenging now to be getting a two-bedroom apartment for that price, and that’s pretty confronting. I helped buyers get similar apartments for $610,000 six months ago,” he said.

Mr Dendrinos said he was increasingly seeing first-home buyers compromise on the size of the apartment they wanted, or looking to borrow more, because they didn’t want to change their location.’

What is available for first-home buyers?
Percentage of property type sold below the price caps
Capital cityFHLDS price capHousesUnits/apartmentsAll dwellings
Sydney$700,00030%48%36%
Melbourne$600,00028%61%37%
Brisbane$475,00034%65%41%
Perth$400,00033%62%35%
Adelaide$400,00032%69%38%
Hobart$400,00035%51%38%
Canberra$500,00013%62%34%
Darwin$375,00024%70%39%
Notes: all residential properties sold with a recorded price, 1 July to 31 December 2019. Capital cities are Greater Capital City Statistical Areas. Source: Domain Group.

SOURCE: https://www.domain.com.au/news/fear-of-missing-out-back-for-sydney-first-home-buyers-as-prices-rise-932720/?utm_campaign=strap-masthead&utm_source=smh&utm_medium=link&utm_content=pos5&ref=pos1

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Mental Health Housing and Homelessness Inter related … AHURI

HOW did the ‘Lucky Country’ get here?

DID it begin with the Howard Govt in the late 1990s opening the floodgates to high immigration?

WHO triggered this?

Frinstance with …

-middle class Chinese lured by ‘Flexible Citizenship’ when they purchased our real estate or education

-that led to a Housing Boom in the early 2000s

-2008/09 following GFC developers could sell 100% of ‘new homes’ overseas (FIRB Ruling)

.up from 50%

-vast range of Visas enabling real estate purchase to gain a Permanent Resident Visa

IS this why there was a huge influx of foreign buyers competing in our Housing Market?

.house prices escalated

.real estate sector exempt from anti-money laundering laws

-NSW Government has sold off much of its Public Housing Estates

.for private redevelopment and overseas buyer market

THAT’s apart from job losses … 1.6 Million Visa Workers in Australia … low stagnant wages … insecure work … 19.7% Unemployment (1 Million unable to find work) …

WHERE’s the Miracle?

Image result for messiah from the shire

Photo: AIMN

IN THE LUCKY COUNTRY WE HAD 70% HOME OWNERSHIP …

Related Article: Report Shows Three Million People in Poverty in Australia and Why we must Act to Support Each Other!

https://caanhousinginequalitywithaussieslockedout.com/2020/02/20/report-shows-three-million-people-in-poverty-in-australia-and-why-we-must-act-to-support-each-other/?fbclid=IwAR3-GZ0Ainz6QabcSw8llFBIVJYwmhnrRX0oMaHogAyxseTqXH5C5jllN30

Mental Health Housing and Homelessness Interrelated … AHURI

RESEARCH DINAH LEWIS BOUCHER THU 20 FEB 20

Australia’s housing, homelessness and mental health systems are crisis-driven and not well integrated, meaning many struggle to access required support when needed, reveals new research.

The national study, Trajectories: the interplay between mental health and housing pathways, is one of the first to examine the relationship between the housing and mental health pathways of people with lived experience of mental ill-health.

Undertaken by Mind Australia in collaboration with AHURI the quantitative analysis highlights the impact mental health issues have on a person’s financial situation, and ultimately, directly impacting their housing stability.

“People who experienced severe psychological distress had an 89 per cent increased likelihood of financial hardship in the following year and a 96 per cent increased likelihood of financial hardship within two years,” the report said.

“People whose mental health deteriorated to the point where they experienced symptoms of anxiety and depression and who did not see a health specialist were 65 per cent more likely to face financial hardship, such as going hungry, having to sell possessions or not be able to pay housing costs.”

Highlighting potential points of “practical intervention” and areas for “system improvement”, the research identifies five housing trajectories people commonly experience as a result.

Five common housing and mental health trajectories: AHURI

 Excluded from help required, this trajectory is characterised by a lack of access to housing or mental health care.

• People stuck without adequate support, is a trajectory where they are trapped in inappropriate housing, institutions or services due to a lack of options.

• The cycling trajectory is marked by a downward spiral in which people enter into and drop out of supports repeatedly, which progressively erodes their resources.

• People on the stabilising trajectory have access to secure, appropriate, safe and affordable housing, ongoing mental health support and the social and financial resources necessary to focus on recovery

• People on the well supported trajectory have the type of housing and level of care that is right for them and can achieve their ambitions beyond housing and mental health.


Housing as foundation for mental health recovery

“For people with ill mental health, appropriate housing is housing which allows for control of space,” report co-author Dr Sarah Pollock from Mind Australia said.

“It’s in a safe neighbourhood close to family and friends; and has good access to public transport, services, and opportunities for work, volunteering or study.

“Our research finds that having access to safe, secure, affordable and appropriate housing is the foundation to recovering from mental ill health,” Pollock said.

The research found that housing outcomes for people experiencing mental health issues showed that mediating factors, such as social support, having good general health, and accessing mental health and other health services, can reduce the likelihood of housing instability.

Stable social support reduced the likelihood of deteriorating mental health to the point where a person experienced symptoms of anxiety and depression by 33 per cent, reducing the length of time a person was unwell by 6 per cent,” the report said.

#Research#AHURI

AUTHOR

Dinah Lewis Boucher

739b6a06-1eb8-489e-b815-97aa24b501ed

SOURCE: https://theurbandeveloper.com/articles/housing-the-foundation-for-mental-health-ahuri?utm_source=TUD+Master+List&utm_campaign=47fd717883-EMAIL_CAMPAIGN_2019_07_03_11_11_COPY_01&utm_medium=email&utm_term=0_9f25b32131-47fd717883-188322339

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Report shows three million people in poverty in Australia and why we must act to support each other

FROM A CAAN CONTRIBUTOR … Here’s how he sums it up!

THREE MILLION HOMELESS IN AUSTRALIA … 800,000 children.

People living rough, can’t afford rent, Newstart below poverty line.

Add to that the huge over supply of apartments (not just my ramblings).

Righteous government crowing about affordable housingwho’s it for?

We are probably the least equitable westernised country on the planet.

Under the LNP we have gone backwards. But it’s OK to keep your franking credits, it’s ok to systematically underpay your workers …

Do CEOs find themselves underpaid?

Spew venom at Unions but allow politicians to use taxpayers money to supplement election campaigns … Come on people get real!’

Report shows three million people in poverty in Australia and why we must act to support each other

The 2020 Poverty in Australia Overview, released today by the Australian Council of Social Service and UNSW Sydney, shows more than one in eight adults and one in six children live below the poverty line in Australia.

Australian Council of Social Service CEO, Dr Cassandra Goldie said: “It’s not right that in Australia, one of the wealthiest countries in the world, more than three million people, including three quarters of a million children, are living in poverty.

“We want to support each other. It’s who we are as a nation. But our economy is leaving people behind, with persistently high poverty rates despite decades of uninterrupted economic growth.

“People living in poverty include young people working to get their foot in the door of the competitive job market, single parents juggling caring responsibilities, and older people confronting age discrimination.

“The job market is changing, with jobs less secure, and fewer entry level jobs than there used to be. Our housing costs are among the highest in the world and are locking people in poverty. For households of working age with the lowest incomes, average housing costs rose by 42% from 2005 to 2017.

“Australia’s income support system was designed to help people when they are going through tough times. But key income support payments – Newstart and Youth Allowance – have not increased in real terms in 26 years and they are both well below the poverty line.

“The low rate of Newstart, a lack of jobs and unaffordable housing are locking people in poverty. “Not only has poverty remained consistently high in our wealthy country, the depth of poverty is getting worse, with households in poverty on average living 42 per cent below the poverty line, up from 35% in 2007.

“It’s clear we must act to lift people out of poverty. The Government can reduce poverty by boosting growth in jobs, increasing Newstart and Rent Assistance, and investing in social housing to ensure everyone has a safe place to call home,” Dr Goldie said.

The report’s lead researcher, UNSW Sydney Associate Professor Dr Bruce Bradbury said: “The poverty rate in Australia is worse than in most other wealthy countries, including New Zealand, Germany and Ireland.

“Our report finds that 13.6 per cent of people in Australia are living in poverty and that poverty rates have remained at about this level for the past decade, despite economic growth.
“Child poverty has consistently been higher than overall poverty, ranging from 18 per cent to 16 per cent over the past decade and now sits at 17.7 per cent – more than one in six children.”

Professor Carla Treloar, Director of the Social Policy Research Centre, UNSW Sydney, said:
“We cannot accept these high, persistent levels of overall poverty and child poverty.
“We can see in recent decades the impacts of changes to income support settings on poverty levels. It’s clear we must take action on income support, housing and employment to lift people out of poverty,” said Professor Treloar.

Read full report

http://povertyandinequality.acoss.org.au/wp-content/uploads/2020/02/Poverty-in-Australia-2020_Part-1_Overview.pdf

Key facts:

3.24 million people in Australia (13.6% of the population) live below the poverty line.
774,000 children under the age of 15 (17.7% of all children in Australia) live below the poverty line.
• More than one in eight adults and one in six children live below the poverty line in Australia.
• The poverty rate in Australia is worse than in most other wealthy countries. It is worse than in New Zealand, Germany and Ireland, according to the latest figures from the OECD.
• In Australia, the poverty line is $457 per week for a single adult. The poverty line is measured as 50% of median income.
• The average ‘poverty gap’ (the difference between the incomes of people in poverty in various types of families and the poverty line) is $282 per week.
• The single rate of Youth Allowance (plus Rent Assistance and Energy Supplement) is $168 per week below the poverty line.
• Our survey of young people on Youth Allowance found 9 in 10 skip meals and 1 in 3 have withdrawn from their studies because of a lack of funds.
• The single rate of Newstart (plus Rent Assistance and Energy Supplement) is $117 per week below the poverty line.
• Our survey of people on Newstart found more than 8 in 10 regularly skip meals and more than half have less than $15 a day left after housing costs.
• The single rate of the Age Pension (plus Pension and Energy Supplements) is closer to the poverty line, but still $10 per week below. • Among the lowest 20% of working-age households by income, average housing costs grew by 42% from 2005 to 2017 (compared with an average rise in housing costs of 15% for the middle 20%).
Newstart, Youth Allowance and Rent Assistance have not increased in real terms in 25 years.
ACOSS is calling for a $95 per week increase to Newstart and Youth Allowance; a $20 per week increase to Rent Assistance (as a first step) and for these payments to be regularly indexed to wages, as is the case for the Age Pension.

Media contacts for ACOSS, UNSW and partner interviews:

ACOSS, Monique Vandeleur 0419 626 155
UNSW Corporate Communications, Belinda Henwood, 0412 270 034
The Brotherhood of St Laurence, Bridie Riordan, 0491 159 256
Good Shepherd Australia New Zealand, Clare Kermond, 0407 907632
cohealth, Sara Norbury, 0447 125 166
Anglicare Australia, Maiy Azize, 0434 200 794

SOURCE: https://www.acoss.org.au/media-releases/?media_release=report-shows-three-million-people-in-poverty-in-australia-and-why-we-must-act-to-support-each-other

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We look at The great Australian betrayal (we used to call it the dream)

DESPITE the all too numerous factual reports from Macro Business that reveal WHY a Whole Cohort of Australians have been locked out of Home Ownershipdue to very pooor government policies … why has Jess failed to grasp the point?

POLICIES INCLUDING

real estate gatekeepers exempt (excluded) from Anti-Money Laundering Laws (Morrison Govt: October 2018)

-second tranche of the AML Legislation shelved for more than 12 years prior

-the lure of a ‘Permanent Resident Visa’ following real estate purchase with Medicare thrown in …

.2.3 Million Visa holders in Australia 2019 (with many seeking real estate and permanent residency)

.almost 400,000 migrants 2019 all needing accommodation thus high competition for housing hiking house prices

public housing estates sold off for private redevelopment

YET this is the best that Jess could do?

AS David Llewellyn-Smith writes …

‘What’s the point, Jess?’

What’s the point, Jess?

It has to be said. Jess Irvine today:

This week, three of Australia’s leading housing academics, Hal Pawson, Vivienne Milligan and Judith Yates, released a book, Housing Policy in Australia: a case for system reform, which pulls together decades of research into what they see as a systematic failure of Australian policy when it comes to that most basic of human rights: shelter.

…So what would a national housing strategy look like?

First, it would be overseen by a dedicated housing minister at cabinet level…Second, we need a dedicated national agency responsible for overseeing housing policy…Reform of tax breaks on housing, most pressingly on investment housing…All renters need greater rights to long-term and stable leases.

In short, Australians deserve a national strategy to ensure access to stable and affordable housing – not just the politicians’ latest trick.

Bravo.

But why would anybody take this seriously? Jess is the fig leaf for the most egregious property spruiking machine in Australia: Domain and affiliates.

What’s the point of the above when Jess spends the other half of her time promoting mass immigration as well? The number one house price pump priming mechansim in the economy.

I’d rather read The Pascometer. At least he was the wolf, not the wolf in sheep’s clothing.

View: https://www.macrobusiness.com.au/2020/02/whats-the-point-jess/

NOW … SHARE TO LET OTHERS KNOW WHAT HAS HAPPENED … to counter the Media Spin that overlooks what is at the core of this criminal predicament!

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OPINION

The great Australian betrayal (we used to call it the dream)

Jessica Irvine
Jessica Irvine

Economics writer February 20, 2020

View all comments

The year is 1985. Bob Hawke has stormed into the Lodge with a landslide victory in the 1984 election. On the radio, the British band Dire Straits dominates with its Brothers in Arms album and its hit song Money for Nothing extolling the benefits of being a lead guitarist: That ain’t workin’ that’s the way you do it:/Money for nothin’ and your chicks for free. The average Australian home price is somewhere between twice and three times the national average salary.

Illustration: Dionne Gain
Illustration: Dionne GainCREDIT:

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Sure, interest rates are about to hit the roof and recession is on its way, but for now, at least, the pathway to home ownership for young Aussies (a cohort who will one day face the disparaging epithet of “OK Boomer”) is relatively clear.

Fast-forward three decades. What seemed like an innocent enough and catchy radio tune has turned prophetic. Real wages have risen by about a half, but home values have tripled. It’s Australia 2020, and that’s the way you do it: money for nothing and it’s capital gains tax free.

Today, Australian home values are worth about seven times the average salary. In Melbourne, it’s eight times. In Sydney, it’s more than nine times. And that’s before the latest resurgence in home values.

It’s the untold back story to Australia’s recent economic success. Until now.

This week, three of Australia’s leading housing academics, Hal Pawson, Vivienne Milligan and Judith Yates, released a book,  Housing Policy in Australia: a case for system reform, which pulls together decades of research into what they see as a systematic failure of Australian policy when it comes to that most basic of human rights: shelter.

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“Housing system reform is overdue and increasingly urgent,” they conclude.

While global factors, such as ultra-low interest rates, have pushed up home values globally, the deterioration in affordability has been even more pronounced in Australia, the authors find. Indeed, Australia has seen the worst decline in home affordability, as measured by home values as a multiple of incomes, of any major OECD country since 1985, according to their analysis.

Why? Far from being a symptom of our success, rising home values are a sign of supersized policy failure at the national level, they say.

While housing policies periodically get some time in the political sun – usually around elections – the last time Australia had a serious comprehensive national strategy to house its people was in the post-World War II era, when the federal government led the great push into the suburbs. Since then, reforms have been sporadic and often counterproductive.Play VideoPlay video2:26Housing values increase in every capital city

January saw an rise in home values across every capital city with Sydney and Melbourne leading the charge.

The authors point to the obviously harmful impact of the capital gains concessions on investment property, which has inflated demand for housing while encouraging property to be viewed as a speculative vehicle for wealth accumulation rather than a fundamental need.

Meanwhile, rising home values have pushed more people into private rental accommodation, where tenant rights have not kept pace. Meanwhile, those on low incomes, squeezed out of private rentals, have encountered an overburdened and inadequate public housing system.

We are now at a crunch point, the authors argue, where in addition to the obvious inequality of Australia’s housing system, the manifest failure to ensure a path to home ownership will put increasing stress on the national budget as households that do not own their home require higher support payments in retirement to cover housing costs.

So, what to do about it?

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“There is no responsible ‘business as usual’ option,” Hal Pawson told a Committee for Sydney event this week to launch the book. “A national housing strategy is long overdue and can only be led by the Commonwealth. It must be national because … it’s plain that key instruments of housing policy, especially tax and social security settings, are controlled by the Commonwealth and not the states.”

So what would a national housing strategy look like?

First, it would be overseen by a dedicated housing minister at cabinet level. Federally, Michael Sukkar is Australia’s current housing minister, but he’s not in cabinet and he juggles the role with the not insignificant responsibilities of being Assistant Treasurer.

Second, we need a dedicated national agency responsible for overseeing housing policy, such as the US Federal Housing and Urban Development department. To his credit, Prime Minister Scott Morrison promised at the last election to beef up the existing National Housing Finance and Investment Corporation with more research powers to the tune of $5 million a year, adding to its existing twin responsibilities to both oversee Morrison’s election announcement of a first home loan guarantee scheme and his announcement as Treasurer in the 2017 budget of funding to help the community housing sector gain access to cheap credit.

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This rebuilding of an institutional capacity at the national level to deal with housing issues is an important first step. But there are plenty of others too.

Reform of tax breaks on housing, most pressingly on investment housing, must be on the table, the authors argue. As must a switch in the tax base of state governments from stamp duty to a land tax.

Targets must also be set to ensure new developments include affordable rental housing in well located areas to house key workers.

All renters need greater rights to long-term and stable leases.

And those pushed into the public housing system by increasing demand in the private rental market need quality housing that does not compound the disadvantage they already face.

In short, Australians deserve a national strategy to ensure access to stable and affordable housing – not just the politicians’ latest trick.

Jessica Irvine

Jessica Irvine is a senior economics writer with The Sydney Morning Herald.

The great Australian betrayal (we used to call it the dream)

SOURCE: https://www.smh.com.au/money/borrowing/the-great-australian-betrayal-we-used-to-call-it-the-dream-20200219-p542cy.html

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RBA Tries to Explain why Sydney and Melbourne Housing is so expensive

BUT … here in fact is why!

it is curious that the RBA did not mention differences in population growth, driven by immigration

Sydney and Melbourne are growing quickly driven by mass immigration

growth is obviously fueling demand and helps to explain why dwelling values in Sydney and Melbourne have grown so much faster

university academics last month released research showing that mass immigration is unambiguously lifting Australian house prices

where the new migrant population grew by 1 per cent each year, house prices likewise rose by 0.9 per cent

house prices would have been around 1.4 per cent lower per annum; units 0.8 per cent lower without immigration [from 2006 to 2016]

specific migrant groups also had a bigger impact on house prices than others; Chinese and Indian immigrants have high rates of home ownership

immigration the major driver of population growth since the mid-2000s; immigrants more likely to move to major cities than existing residents

Why Sydney and Melbourne housing is so expensive

By Leith van Onselen in Australian Property

February 18, 2020 | 10 comments

The Reserve Bank of Australia (RBA) has released new research which attempts to explain why dwelling values respond much more to interest rate changes in some parts of the country (e.g. Sydney and Melbourne) than others:

We know that housing prices vary substantially across different parts of the country. The average price of housing is higher in Sydney, for example, than it is in Hobart. We also know that changes in interest rates have an effect on housing prices. When the RBA lowers the cash rate housing prices typically end up higher than they otherwise would have been. These two facts have been well documented, but what we don’t know is how these two facts fit together. For example, when the RBA lowers interest rates, is the change in housing
prices larger in Sydney than in Hobart? And what are the factors that explain any differences in the response of housing prices to interest rates across the country?

In this paper we examine how monetary policy affects housing prices across local areas. We explore three related questions:

1) How differently do housing prices respond to monetary policy across areas?
2) What can explain these differences across areas?
3) Does monetary policy cause changes in the housing wealth distribution?

We document considerable differences in the response of housing prices to changes in monetary policy across local areas. While housing prices in the median region fall by 2.3 per cent two years following a 100 basis point increase in the cash rate, at the 25th and 75th percentiles, housing prices fall by 0.9 per cent and 3.5 per cent respectively in response to the same cash rate increase.

What can explain these differences across areas? We find that a diverse set of forces are associated with the sensitivity of local housing prices to cash rate changes. We find some evidence that housing supply conditions matter. This is because a fall in interest rates leads to higher demand for housing. For areas in which it is difficult to build new housing – when housing supply is `tight’ – most of this increase in demand will be met by an increase in the price of housing, rather than in the quantity of housing. So changes in interest rates tend to affect prices more in areas in which housing supply is constrained, whether by geography or government regulation. But, on top of this, we find that areas with more mortgage debt, higher incomes and more housing investors also have larger housing price responses to changes in monetary policy.

Relatedly, we also find that changes in the cash rate alter housing wealth inequality. This occurs because expensive areas, which typically have tighter housing supply, are more sensitive to changes in interest rates. These differences, however, dissipate over time, suggesting any change in housing wealth inequality due to monetary policy is temporary.

Overall, this paper documents two findings on the effect of monetary policy on housing prices. First, the distribution of responses is substantial. And second, more expensive areas are more responsive to monetary policy. Housing supply conditions, and the availability of land, go some way to explaining these differences.

But there is clear evidence that other factors, such as incomes, mortgage debt and investor concentration, matter too. This supports the view that housing price dynamics are complex and that a wide range of factors need to be considered when trying to understand how changes in interest rates affect the Australian housing market.

Not a bad effort. Although it is curious that the RBA did not mention differences in population growth, driven by immigration.

As we know, Sydney and Melbourne are growing quickly driven by mass immigration:

This growth is obviously fueling demand and helps to explain why dwelling values in Sydney and Melbourne have grown so much faster than the rest of Australia:

Don’t just take my word for it. Many studies have also found that immigration helps fuel house prices.

For example, university academics last month released research showing that mass immigration is unambiguously lifting Australian house prices, thus making housing less affordable for the resident population:

https://www.domain.com.au/news/immigration-boosts-australian-house-prices-by-as-much-as-6500-a-year-study-924112/

*In cities where the new migrant population grew by 1 per cent each year, house prices likewise rose by 0.9 per cent, according to the study titled The Impact of Immigration on Housing Prices in Australia by senior lecturer at Monash Business School Daniel Melser, and, RMIT University student Morteza Moallemi.

*“House prices would have been around 1.4 per cent lower per annum, and units 0.8 per cent lower, if there had been no immigration [from 2006 to 2016],” they wrote, in the soon-to-be-published study…

“Interestingly, the effect of immigrants on different property types is different – there is a bigger impact on houses than units or apartments,” Mr Melser said.

Specific migrant groups also had a bigger impact on house prices than others, given they were more likely to buy a home, Mr Melser said

“Chinese and Indian immigrants have high rates of home ownership,” he said…

This study supports similar findings from the Productivity Commission

https://www.pc.gov.au/inquiries/completed/migrant-intake/report/migrant-intake-report.pdf

High rates of immigration put upward pressure on land and housing prices in Australia’s largest cities. Upward pressures are exacerbated by the persistent failure of successive state, territory and local governments to implement sound urban planning and zoning policies…

The Grattan Institute’s housing reform blueprint also explicitly stated that “high rates of immigration” are a contributing factor to Australia’s rapid house price growth and reduced housing affordability:

Strong population growth, both from natural increase and overseas migration, has increased demand for housing and contributed to the increase in dwelling prices, particularly in our major cities…

Immigration has been the major driver of population growth since the mid-2000s… Immigrants are more likely to move to Australia’s major cities than existing residents

Why did the RBA’s research paper fail to mention this?

Leith Van Onselen

Leith van Onselen is Chief Economist at the MB Fund and MB Super. Leith has previously worked at the Australian Treasury, Victorian Treasury and Goldman Sachs.

The property market has come roaring back to life.

The property market has come roaring back to life.Source:Supplied

SOURCE: https://www.macrobusiness.com.au/2020/02/why-sydney-and-melbourne-housing-is-so-expensive/

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