Here’s what the ScOmO Guvmnt can do to alleviate Rocketing House Prices …

Part 2!

THE RBA Guvnor has gone as far as he can go … and it would seem it is now up to the ScOmO Guvmnt to implement … at the very minimum … grandfathering Negative Gearing … yes, you B……s! 

In the leadup to the 2019 Election the Labor opposition proposed a policy to open the doors for First Home Buyers and others locked out of Home Ownership … without penalising Investors … they proposed GRANDFATHERING NEGATIVE GEARING!

Hence the Liberals ran a dirty scaremongering campaign … of lies as revealed in ‘Are any of the Coalition’s claims of new Labor taxes actually true?’

https://www.theguardian.com/australia-news/2019/may/14/are-any-of-the-coalitions-claims-of-new-labor-taxes-actually-true

What GRANDFATHERING means … perhaps it was beyond the grasp of some!

‘A grandfather clause (or grandfather policy or grandfathering) is a provision in which an OLD RULE CONTINUES TO APPLY to some existing situations while a new rule will apply to all future cases … ‘.

Thus it was a COMPROMISE which allowed investors to maintain their investments in ‘established’ housing, and allowed them to continue to grow their property portfolios by investing in ‘new homes‘.

This too would ensure the growth of the development sector with more homes being built; more jobs and more $. And it opened the door for Home Buyers to buy an ‘established’ home, it increased the housing supply for them!

However, now we have a predicament where HOUSING is more UNATTAINABLE! FFS!!!

AND as George writes

‘If you explain this to a CAPITALIST MINDSET, they don’t get it.  Indeed, many generally don’t understand the ramifications of NEGATIVE GEARING, because they don’t see how it affects others.

They don’t see how it would adversely affect them, actually, if suddenly their earning capacity ceases. Negative gearing is a form of TAX PERK, a bad one …. the more you earn, the greater the benefit of the perk. That sits very well with them, and so the quest for more and more …

They couldn’t give blooming rats how it affects anyone else but themselves.

Who’s to blame?  We are, of course, the *SILENT MAJORITY*😆….

Many were scared, SPOOKED!! And voted last time around for NG to stay in place!

We cannot afford to let the likes of JOSHY BOY and ScOmO scare the masses again. It is a real scourge on housing affordability …..

As the great YANIS VAROUFAKIS has said, too much emphasis is on HOUSING, and he was DEAD RIGHT. The fact that you can earn above certain brackets on the wage scale entitles you to a larger amount of the TAX PERK?

While others can’t?  Can’t even afford to buy a HOME?….😖. …oh dear me. It is MADNESS.

VIEW what Yanis Varoufakis had to say about Australia’s emphasis on Housing on

Q & A:

FRANKING CREDITS is another … a LOOPHOLE, let’s not forget that one …😫….

It is very CROOK.

READ MORE:  ‘Franking Credits: How Good is Free Money?’

So, it is the system that is broken.  I’ll say again, as a reminder … we had the opportunity to fix it, we squandered it.

To make matters even worse for us all, particularly for the down and outs, the poor people who have been suffering continually, and who were unable to recover, damaged, scared from the days of the HOWARD tenure will have to endure further taunting.  

It has been brought up on the 6.00pm NEWS, talk that the LNP under the gleeful eye of JOSHY BOY, will BROADEN THE BASE OF THE GST … or even INCREASE THE GST….👹….to recoup the losses incurred due to the Pandemic.

If ever there is a way to make QUICK BIG BUCKS for government coffers … it is the GST… a REGRESSIVE AND EVIL TAX.

Let that sink in,  I doubt very much we will be able to sleep tonight ….. It will be a BEX job.

So is the Sc.mmo Guvmnt doing anything about the Record House Price Growth?

Part 1!

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?’

https://www.abc.net.au/news/2021-09-15/house-prices-grow-what-is-being-done/100462060

Australia … we used to have 70% Home Ownership!

AUSTRALIA … we used to have 70% Home Ownership …

WHAT happened to this?

WHAT is needed is HOUSING for AUSTRALIANS … with affordable BUILD-TO-RENT that allows Tenants to BUY!

… Not Foreign Billions and Housing to be marketed to even more foreign buyers with Benefits!

AND what we have learnt from our Commentators …

‘That rent to buy was what the Department of Housing used to do!

Now it’s all about profits, forcing community housing groups to do the same. It’s become a vicious nightmare of CEO’s (many in charities) receiving exorbitant wages, and Rents based on 40% of household income!

This will continue to stifle home ownership. And coupled with elderly home owners having to sell their homes to finance their aged care and then you see the whole mess for our future generations (no inheritance) for those just above the poverty line.’

CAAN: And when was the damage inflicted? It was the late 1990s when the Howard Government … John Howard scapegoated refugees (who were in relatively small numbers) as his government opened the floodgates of the backdoor to migration (with Temporary Visa Holders).

‘John Howard’s Bait-and-Switch:  Is it time for a debate on the mass immigration “Ponzi scheme”?’

https://www.news.com.au/finance/economy/australian-economy/john-howards-baitandswitch-is-it-time-for-a-debate-on-the-mass-immigration-ponzi-scheme/news-story/163e317be07822ca17641dd98415713f

Big Australia’

https://en.wikipedia.org/wiki/Big_Australia

Australia went from a sustainable Permanent Migration system of 70,000 people p.a., to escalate, and prior to the Pandemic there were 2.3 MILLION Visa holders in Australia; of which 1.6 MILLION were Visa workers willing to be exploited (with inferior wages and conditions) lured by the prospect of Permanent Residency.

Who could blame them?

However, this led to high unemployment and underemployment of Australians. Those ‘unAustralian’ employers put about hateful comments like: “Australians won’t work; don’t work”.

Obviously many employers (and companies) have enjoyed the benefits of greater profits from paying such low (below Award) wages; and enjoy TAX BENEFITS contrary to those who pay full tax!

Another very poor Liberal HOWARD Government policy was the introduction of the TAX BENEFITS of NEGATIVE GEARING AND CAPITAL GAINS making HOUSING a financial asset … something you buy and sell and accumulate.

THUS the financialisation of housing that was Shelter!

Our Families locked out not only by Low Wages, and increasingly now Super Inflated Housing Prices due to the competition from those negatively gearing!

INVESTORS are buying up more housing because bank interest rates are too low to leave their money in bank accounts! And the Housing Property Market opened up for them once again with the Chinese withdrawing from their Real Estate Tours. The Chinese are still house shopping here, but have been eclipsed by the Singaporeans (70% Chinese) who have spent $20Bn in the two years to mid 2020!

What is happening with those bags full of Cash?’

Read more!
https://bit.ly/38oYLUU

Businesses in Byron Bay and other coastal towns too have felt the impact of the loss of affordable rental accommodation because they are losing their workers! The fabric of the community is falling apart!

This is due to landlords letting their properties out to short term rentals on AirBnb, and Stayz rather than leasing homes to families and singles for 6 months or more at a lower monthly rate!

Read more!

Banning AirBnb and Shipping in Portable Homes considered as Housing Crisis bites in Coastal Towns’

https://www.abc.net.au/news/2021-08-28/coastal-families-lose-homes-to-airbnb-and-owners-fleeing-cities/100380642?fbclid=IwAR0E6yvyeI3B5r14mxiXVxDSF0lXiIxaRWvgI2elUm6xljcCvWNCQ0mU7vE

AND what has been happening as we so eagerly wait for the 11.00 a.m. presser about the failure of our governments to act early to stop the spread of Covid?

UNDER THE COVER OF COVID …

The developer sector has been beavering away marketing ‘Build-to-Rent’! It has called on the Big Boys from New York!

So another investment avenue for our local Ingestors too!

‘More Foreign Billions pouring into Build-to-Rent (BTR) … ‘

https://www.theurbandeveloper.com/articles/build-to-rent-breakthrough-year?utm_source=TUD+-+Daily+Briefing&utm_campaign=e2a40c93cb-EMAIL_CAMPAIGN_6_11_2021_9_36_COPY_01&utm_medium=email&utm_term=0_982c36d415-e2a40c93cb-195692726

And …

Countdown Begins for Build-to-Rent’s Breakthrough Year’

https://www.theurbandeveloper.com/articles/build-to-rent-breakthrough-year?utm_source=TUD+-+Daily+Briefing&utm_campaign=e2a40c93cb-EMAIL_CAMPAIGN_6_11_2021_9_36_COPY_01&utm_medium=email&utm_term=0_982c36d415-e2a40c93cb-195692726

We hear often ‘We’re all in this together’… however it would seem this has another meaning … another Commentator reminded us that NSW INC raised more than $1 BILLION in Stamp Duty 2019!

See how this all ties in together!

What of the Housing Crisis Nightmare for Australians and First Home Buyers … next? As the floodgates open again to more Chinese, Singaporeans and Indian Middle Class Visa Holders ready to scoop up!

Is this too what is behind the Liberals saying: ‘Sell your Family Home … Downsize … Go Regional’… To open up more opportunities for redevelopment? For more development of high-rise … duplex … townhouses … terraces … villas and retirement villages? FFS!

More Foreign Billions pouring into Build-to-Rent (BTR) …

WHAT is needed is HOUSING for AUSTRALIANS … with affordable BUILD-TO-RENT that allows Tenants to BUY … Not Foreign Billions and Housing to be marketed to even more foreign buyers with Benefits! However …

UNDER THE COVER OF COVID … we have seen more reports recently about the push for BTR … 

HAS it all been part of a “Plan” with house prices having escalated 20% already into 2021 … pricing out many Australians? 

ARE they to become life-long tenants?

Our Youth are ‘a sitting shot’ because dating back to the LIBERAL Howard Government in the late 90s the policies were set in train for low wages; competition for jobs from Visa workers; foreign real estate buying sprees … with ‘Hot Money’ which led to the Housing Boom of 2001 – 2004 locking out our Youth from the housing market.

The real estate gatekeepers were exempted from the Anti-Money Laundering Laws in October 2018 by the Morrison Liberal Coalition Government; and still current!

Leading up to the Pandemic there were 2.3 Million Visa Holders in Australia of which 1.6 Million were Visa workers …

Australia has become like the United States with its ‘Working Poor’ … and the growth of homelessness …

On the other side are those with ‘Tax Benefits’ of negative gearing and capital gains; policies also dating back to the Howard years …

Investors are again swooping in on home sales

Now ‘Billions of investment dollars from around the World’ are pouring into this ‘burgeoning Build-to-Rent sector’.

The New Yorkers, no doubt, have watched how our former egalitarian society has been pulled apart.  We used to have 70% home ownership in the mid 1960s.

Home ownership for 30 – 34 year olds decreased to 50% in 2016. 

https://www.aihw.gov.au/reports/australias-welfare/home-ownership-and-housing-tenure

What will the 2021 Census reveal about the decline in home ownership and the rise in renting? 

At the end of August a summit on BTR is being held with New York based, Michael Streicker, the president of Sentinel Real Estate taking part. 

Streicker is, no doubt, confident in the expansion of this asset class with our families locked out of the housing market. In the United States BTR is the top investment asset class ahead of office and industrial.  

Streicker, a New Yorker, is behind the push for high immigration in Australia!!  He said: 

“The underlying drivers of demand for housing will re-emerge in the coming years as immigration resumes and renters’ expectations for premium product, amenity and service come to the fore.”

To make our families ‘life-long tenants’ to allegedly have longer tenure, and more amenity but at premium pricing!  And if they suffer some misfortune as tenants they will have no security whatsoever!

Seriously how soon can immigration resume, and at such high numbers of 2.3 Million Visa holders with the Delta variant widespread across the Globe?


The New Yorkers are looking to three to four years hence developing a pipeline to support BTR in Melbourne, Sydney, Brisbane and Perth with $1Bn investment over the next four years.

It would appear their timing is very convenient with the Building Commissioner appointed to restore community confidence in apartment developments following the Opal Tower, Mascot Towers and other defect disasters

It would seem not only investors but the apartment development and construction consortia are set to benefit yet again?  To the detriment of our families and communities …

Under the cover of COVID more than 50 BTR projects are in the pipeline, and by 2024 there will be 18,500 BTR apartments in our property market!

More Co2 emissions and the heat-island effect …

Despite a current supply shortage of materials, fittings and fixtures for the Project Home sector, how will this sector deal with more competition from BTR?  How much longer will those who have paid a deposit for a House and Land Package have to wait to build?

‘Construction Boom: Costs of House and Land Packages Blown Out!/

https://caanhousinginequalitywithaussieslockedout.com/2021/08/18/construction-boom-costs-of-house-and-land-packages-blown-out/

READ MORE!

‘Build-To-Rent Flood is Coming as Billions Pour In’

https://www.theurbandeveloper.com/articles/build-to-rent-flood-australian-pipeline

AND … https://www.afr.com/property/residential/sentinel-strides-towards-1b-build-to-rent-portfolio-20210326-p57efy

P.S. Who is Michael Streicker?

-a former board member of the Association of Foreign Investors in Real Estate  … and ?

What else apart from Low Interest Rates and Govt Grants pushed up House Prices?

WHY did house prices jump $200,000 over Christmas 2020 into January 2021?

NOW house prices have jumped $500,000 or more to August 2021 …

APART from very low interest rates and government grants that benefited builders and pushed up house prices … competition from foreign Juwai.com buyers … and investors!

WHAT ELSE CONTRIBUTED TO THE HOUSE PRICE HIKES … FOR THESE SAME AWFUL HOUSES?

WHAT role did the Realtors play in all of this?

They set the prices … there may be a charade of asking buyers ‘what price would you put on this house?’ 

After having indicated ‘The Guide’ price

How do we know any of this is so?  When it is only what they tell us!

Early 2021 agents opened a home once or possibly twice a week for home buyers to view for as little as 30 minutes at each ‘Open Home’.

That’s all …  in the house advertisement the agent may invite buyers to contact them and arrange an inspection … however when buyers contacted agents … we have learnt … they were then told that they would have to attend the ‘Open Home’; no other times could be arranged!

The ‘Open Home’ was marketed on two major real estate sites:  domain.com.au and/or realestate.com

This marketing led, in some instances, to hundreds of attendees.   This huge competition for each home would not be about creating FOMO, would it?  (FOMO = fear of missing out)

Now in COVID August 2021 agents have had to reorganise the marketing with one to one private inspections …

SO NOW Agents are running ‘Pre Auction’ Views … ‘Expressions of Interest,’ and invite Buyers to price properties … WT ****!

Not only do Buyers do most of the work searching the marketing sites of Domain or realestate.com, and drive all over Sydney and beyond, but now they are expected to price properties …

WHEN will Buyers wake up?  Why price up properties?  Because not only does it mean a bigger mortgage, but will strip one of any $$ to update, and it means more Stamp Duty

So stick to ’the Guide’!  FFS!

What SMH Readers believe will bring an End to the hideous Housing Boom!

‘ … we have to get the Tax Bludgers out of the market by doing away with negative gearing and also the DivImpCredrefund bludgers.  Why should the many be paying the taxes of the few?’

OR put another way …

-House prices are primarily influenced by 2 things:

1. NG and CGT tax concessions
. These are not only ridiculous in an overcooked property market, but also unaffordable given the high level of government debt approaching $1.4 trillion. Remove them and prices will not only plateau but fall back towards normality, and

2. Interest rates. Even a small increase in interest rates will see many defaults in the mortgage market leading to prices falling.

The real question is how long can the RBA continue playing games holding the official cash rate at 0.01% while the real rate of inflation on essential items is 5% p.a. (45% over the last decade).

The global bond market knows that inflation is rising, hence the higher yields which is normally followed by higher interest rates.

Then from another who perhaps has a vested interest in high immigration wrote:

‘One interesting thing is all those people wanting immigration stopped because it was causing the housing market to spiral out of control were wrong. And as for immigration taking our jobs, wrong again, as unemployment is (slightly) falling’

Which drew this response:

‘It’s not wrong. Just look around. Go to a physical auction and see the demographic makeup of the bidders.

Blind Freddie would tell that is a major factor. People forget we are twenty years into an immigration explosion.

The gates were opened back then, and now It’s a self-propelling momentum driven market.’

CAAN:  How can this be disputed? 

The Howard Government in the late 1990s enticed the Middle Class Chinese to invest in education and our real estate lured by ‘flexible citizenship’.  This led to a housing boom in 2004!

AND …  permanent migration of 70,000 p.a. was replaced with temporary migration through a large number of Visas including a range of investment visas, AND … family, parent, grandparent, guardian, student, PhD student, the 457 visa later replaced by the skilled work visa enabling these people to gain permanent residency esp. if they bought a ‘new home’!

Prior to the Pandemic there were 2.3 MILLION Visa holders in Australia of which 1.6 Million were visa workers!

Many from overseas were lured when they gained either student visas or work visas with the prospect of ‘permanent residency’.  They were willing to work long hours and for low rates of pay!

There have been numerous reports about the exploitation of these people.  They have come here in large numbers and this led to high unemployment and underemployment of Australians!

Read more!

‘The one million Australians forgotten in the unemployment statistics’

https://thenewdaily.com.au/finance/work/2019/10/17/unemployment-figures-marginally-attached-australia/

AND …

-Why does this article not include the opinion of Prof Cameron Murray, an expert in property economics? He produces relevant, thoughtful and informative pieces on a semi-regular basis, and knows what he is talking about.

Given the very wide range of “forecasts” this article’s experts have produced and the uncertainty that they demonstrate, your readers might have been better served by an opinion piece informed by just one economist.

…..

Auctions …  and/or pressure from Sales Negotiators …

‘If there are two people who want the same house then the prices will go up, if there is one or none the prices will stay the same or drop.’

-The “property boom” has resulted from every government in Australia ratcheting up house prices artificially over several decades by throwing cash at first home buyers.

This massive misallocation of capital, coupled with outrageous lending practices by banks, has created a potential economic disaster, which, once the slide in house prices begins, will lead to the banks ending up in difficulties again.

Intervention by the regulators could trip the collapse of this wobbly pile of debt.  Other triggers could be current fall of payrolls induced by the egregious mismanagement of the SARS COV-2 epidemics in Australia.

And an eventual increase in interest rates for house mortgages is, in the long term, inevitable.  It is simply a matter of which trigger is reached first to give an avalanche of foreclosures.  The legal practices handling bankruptcies will become the new hot industries.

Whichever party in power at the APH will collect most of the opprobrium.

-Meanwhile we keep buying properties, keep renting them out and keep getting tax advantages whilst enjoying almost free money. Long may it continue.

And there lies the reason why our future generations will largely be consigned to rent for most of their lives!

The exceptions will be those inheriting a large proportion of a house, or multiples thereof, and the highest-earning professionals.

Having a go from a base of $0 won’t be enough for most young people to enter the housing market.

Read more!

‘Housing boom tipped to end this year’

https://www.smh.com.au/politics/federal/housing-boom-tipped-to-end-this-year-20210804-p58fo6.html#comments

GEN X bears the Debt Burden … the Cost of Buying a Home has increased by 130%

MEANWHILE … many GEN Y and Z are locked out

THIS REPORT REVEALS:

-the family home is an expense rather than an asset

IT’S TIME NOW the MORRISON GOVT addressed this!

IN fact the Liables have put the financial security of not only GENS X Y & Z but also 60% of Boomer and Silent Generations at risk … because many have had to re-mortgage, or downsize to release equity; taking on default risk by standing as Guarantor for their first-time buyer families

-in 2010 the proportion was less than five per cent!

-the lowest wages growth since 2013 has worsened the problem  

-high household debt creates the ‘debt overhang effect’ and reduces consumer spending

READ MORE!

The cost of buying a home has increased by 130 per cent over two generations and Generation X is bearing the debt burden

https://www.abc.net.au/news/2021-07-23/house-prices-property-generation-x-household-debt-affordability/100315500

WHY is the Housing Market Insane and Out of Reach for Young Australians?

The exclusive survey, conducted for The Sydney Morning Herald and The Age by research company RESOLVE Strategic,* heard from voters who had attended housing auctions this year, and came away saying “people were in shock” from the surge in prices.

*RESOLVE is a company with strong links to the Liberal Party founded by Mr Reed, a director of CT Group formerly CROSBY TEXTOR

IS the Liberal Party now worried with …

-69% of those surveyed now realize the high house prices cannot be good for Australia

60% of voters saying young people in their area will never be able to buy their own homes

… are they now realizing that the government grants and low interest rates have in fact benefited the banks, developers, home sellers, real estate agents … not buyers hit with escalating house prices?

KEY POINTS WE GLEAN FROM THE COMMENTATORS … have a think about these BECAUSE they make more sense!

-AUSTRALIA is badly exposed to winds of international interest rate moves; interest rates are picking up in the U.S. now clouds on the horizon for mortgagees

your home rises in value; to buy back into the same market even if downsizing the gains are meaningless; in fact likely they disappear!

-it is just MONOPOLY MONEY

‘retirement villages’ don’t just cost a motza to buy into; they cost a fortune in ongoing fees so what you gained from the sale of your home will be eaten up

-this Government are positioning us to make sure that the average person exhausts their ‘wealth’ while still alive through reverse mortgages etc.

-serious action is needed to shift ownership back to owners; not investors

.how about allowing owner-occupiers to make 50% of their mortgage payments out of pre-tax income?

Torrens Title housing and apartments are unaffordable in the eastern suburbs, north and lower north shore suburbs, inner west suburbs due to close proximity to Sydney CBD

-Torrens Title housing in south-west Sydney also has become unaffordable; land releases here have led to loss of our peri urban farmlands (our Sydney Foodbowl), flora and fauna and koala habitat

.with inadequate infrastructure esp. sewerage

-north west Sydney land and house prices also surging despite much of this land being flood prone

-the Liberal Party played to the greed of negative gearing beneficiaries, capital gains discounts and the free from tax retirees (dividend imputation – aka franking credits – free money)

-PM Howard started this with the “first home owner’s grant” of $14,000 that saw house prices rise three times

-the system is rigged by the wealthy who avoid tax and acquire property after property paid for by their tenants; thus making the young and poor subsidise them

-one personal Super Fund (one individual) has more than $560M in Super; no tax!

-regional Australians are also experiencing high housing costs along with costly and scarce rental homes

-the RBA is wilfully pursuing monetary policy which destroys future growth, at little or no benefit to the economy now

we need a new paradigm for home “ownership”. Why should young people looking for shelter and security have to compete with the already rich wanting an investment?

-something is desperately wrong in our economy when non productive assets (housing) attract so much attention and productive assets (a business e.g. in hospitality) are allowed to fail

too many incentives for investors incl. foreign investors with too many decision makers benefiting

-our young people need ‘a Fair Go’; they are the future!

WILL Voters make the connection?

… Imagine if Labor had won the last Federal Election in 2019, and implemented the whole suite of its policies around Housing Affordability?

How different would it be now?

Sadly Labor is not likely to repeat this, and we now have what we have!

A return to the pre-War inequity of Home Ownership

VIEW THE GRAPH; we were not able to copy it!!

https://www.smh.com.au/politics/federal/the-market-is-insane-many-voters-fear-home-ownership-is-out-of-reach-for-young-australians-20210722-p58c57.html?fbclid=IwAR0ObSccld1yNCLa-WNhco8yBoOBeoHRLEJcx0X9MkS70d3IgMlooV4jRoQ#comments

How to Restore Housing Affordability

May be an image of ‎4 people, wrist watch, eyeglasses and ‎text that says '‎Nicki Hutley Alexander Downer DRUM ه tv THE 2 NEWS လ iview 6PM 11PM AEST ANYTIME Amy Coopes Ali Kadri‎'‎‎

Image: ABC The Drum 14 June 2021

THE DRUM ON HOUSING AFFORDABILITY 14 JUNE 2021

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 decade to 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 Buyers push 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.

-in combination with the very low interest rates

VIEW VIDEO 14 JUNE 2021

https://iview.abc.net.au/video/NC2107H096S00

Michael Pascoe reveals how the Housing Affordability Crisis has come about

‘Michael Pascoe: The federal government doesn’t care at all about the housing crisis’

WHY would it? Having created it …

A MUST READ! Please do consider sharing!

Keeping the link here for access … to quote from as often as possible!

PLEASE SHARE!!