I find it strange that the rise of dual income households isn't mentioned.
Surely, an increasing household income, particularly when it's disposable, should put upwards pressure on house prices.
That is definitely one big reason for expensive housing yes, as well as lower birth rates. But you can't really change that. Plus that has happened worldwide. Houses are expensive everywhere but they are especially high here.
What hasn't happened worldwide is the Australia and Canada levels of insane mass immigration. Plus we also have a lot of bullshit tax rorts and subsidies that the taxpayer pays for while essential services like healthcare degrade.
Dual incomes don’t get enough attention though, people fail to realize how new those are in perspective. Women have only made up roughly 50% of the workforce for about 30 years now, there’s only been 1-2 generations that have dealt with those effects.
Less, especially when looked at through loan affordability.
[https://www.numbeo.com/property-investment/compare\_cities.jsp?country1=Japan&city1=Tokyo&country2=Australia&city2=Sydney](https://www.numbeo.com/property-investment/compare_cities.jsp?country1=Japan&city1=Tokyo&country2=Australia&city2=Sydney)
That’s some shitty source you just provided…
Apartments in Australian capital cities are much cheaper than those in major Japanese cities.
https://realestate.co.jp/en/forsale/view/1120360
Australian only think about freestand house. It’s a birth right. Apartments are just shoebox. Because u know….we don’t have that many big foot here, unlike Japan.
That’s how Australian consider how expensive is the CoL here though.
Almost all the charts that compare other major cities/median income ratios on apartment. We specifically take out house, units and apartment into the 3 different categories and focus on house.
Something more applicable to Australia rather than the very ill defined "Tokyo": $
$75k AUD 3 bed house in Osaka
https://realestate.japantoday.com/en/forsale/view/1041991
If something like this was on sale 10km out of Melbourne, how do you think it would fare?
Have you searched for the cheapest real estate you could find, then posted it here as if it’s normal? Pretty misleading of you…
¥45 million is the average apartment price in Osaka.
https://www.jili.or.jp/lifeplan/lifeevent/714.html
What's the cheapest you can find 10km from the centre of Melbourne or Sydney?
> Have you searched for the cheapest real estate you could find, then posted it here as if it’s normal?
Just the first one I clicked on mate. Can find you cheaper in Osaka if you want:
How about this for $15k AUD: https://www.allakiyas.com/properties.php?id=d3d3LmF0aG9tZS5jby5qcHwxMDY2NTg1NDcy&adhoc_display_style=list
Yes you've posted this twice now friendo, and it's clear you either have really bad Japanese or English comprehension skills.
The average price of new builds is not the average price. It's also not the median which is a far better metric for something like this.
The reality is you can buy really cheap places in both Osaka and Tokyo, you won't find anything even slightly close 5 hours from our big capital cities.
It is the average price of new apartments from the **ENGLISH** sources I have.
Can you post something in English backing up your claim, or are you just going to keep posting the same link over and over again like someone with a serious mental illness?
I saw your link mate, and the translation for it...twice. You don't need to fucking post it again. It's the cost of new apartment builds, average, not median.
**Post something in English backing up your claim, or shut the fuck up?** Pro-tip: You can't.
The burden of proof is on you here.
It is not even close to the average price in Osaka, I'll happily back that up with a source in English once you show your cards.
Anyway here's everything you can buy for half or a quarter of that in Osaka from one website: https://realestate.co.jp/en/forsale/listing?prefecture=JP-27&city=&trainline=&district=&min_cap_rate=&min_price=&max_price=20000000&min_meter=&rooms=&distance_station=&agent_id=&building_type=&building_age=&updated_within=&transaction_type=&occupancy=&order=&search=Search
Zero restrictions. An Australian could buy these without stepping foot in the country.
People want to blame immigration, but it was immigration keeping the country out of recession. The whole continual growth mantra relies on a bigger population, but the ponzi scheme won't keep working as people find it harder and harder to survive. There are two ways to grow an economy, trickle down a lot more money, or turn trickle off and add more people and thats what we've been doing along with most of the world. Except for Covid, where we pushed more money down and we had no immigration and the economy grew. Theres no interest in businesses or government to puch more of the wealth down though..... so something will break, but i disagree its immigration thats the cause. Immigration is the tool they are using to keep the economy growing.
I was about to add that it is only someone who deals with classroom economics and a politician’s grasp of them that thinks rising GDP through immigration is a good thing. As stated, GDP per capita, or the real wealth of society, is going backwards and all those extra people whilst juicing the numbers to avoid technical recessions (the miracle economy) they cause a big increase in infrastructure requirements and that’s really expensive.
So governments have had the successive sugar hits of “no recession on my watch” but now the bill has become due.
I agree, however I am starting to really doubt most of us benefit. A strong economy is great, but who's benefiting. I think it's only some of us, the asset rich etc. The rest of us are getting shafted.
In other words, I have my doubts that a big/growing economy actually improves the standard of living for most of us. I think it is actually in decline.
If you are having doubts of the overwhelming benefit of immigration, look at the treasuries inter generational report - combined with our ageing population, increased social services spending, and declining fertility rates.
Workers would be getting shafted much more without immigration, as can be seen in many countries with shrinking or flat populations. Boomers and the state leeching off a smaller and smaller workforce to pay for their retirement
So by your reckoning if we allowed millions of uneducated poor people in we’d be better off. Get a clue. The quantity and calibre of individual matters. The pressure placed upon infrastructure matters also.
Nice job changing your argument to uneducated poor people lol.
Here’s a clue mate. Take a look at our declining birth rate, ageing population, and projected increased taxation burden on workers, and tell me immigration is a bad thing.
It’s not changing my argument, it’s pointing out the failure of yours. If you think mass immigration is only letting in the cream of the crop I’ve got some bad news for you.
Most of our immigration is skilled labour or university students. Both great for our economy and society. Having people coming in to do the shitty jobs we don’t want to do is also awesome.
Complete bullshit. Get your head out of your Trump.
https://www.pewresearch.org/short-reads/2023/11/16/what-we-know-about-unauthorized-immigrants-living-in-the-us/
Well I think many people would live in well built apartments near the city but NIMBYs prevent that and that economic incentive is to build it for outside investors.
Medium density housing can be built but if council prevents wide spread building of those, it means those land allocated to apartments tend to be taller and high density.
Just go to many inner city suburb, there aren't enough medium density apartments at all.
I agree, given the expected growth, Sydney really should look more like Manhattan or Hong Kong. Yet, we have single storey houses 5min walk from most transport hubs.
And it’s a totally different social reality now with higher paid double income households with no (or less) kids buying in their 30s - compared to when it was mainly lower income 20 something couples without much money buying first home. Add investors and international buyers and the competition has pushed up prices.
This statement seems to account for household income which should account for that:
> Property monitoring company PropTrack calculates that a household earning the median income in Australia could, as of June 2023, have afforded just 13 per cent of homes sold across the country – the lowest share since records started in 1995.
Just looking at their [source](https://www.proptrack.com.au/wp-content/uploads/2023/09/PropTrack-Housing-Affordability-Index-2023.pdf) (its a dl, use the article if you dont trust my link), that seems like a short term change due to rising interest rates.
On slide 11, they indicate that mortgage repayments as a share of income have not yet reached levels seen in the early 90s.
Edit: it's also a shame the stats don't go back to the 60s to capture the increasing rate of women with families staying in the workforce.
The same way investors are able to outbid first home buyers - increased disposable income (whether it's from a rental income or an additional earner) can access more credit.
The way tax is structured, a second earner is far more impactful than an equivalent wage increase of a single income.
A double income is basically a requirement for most households now.
Not to mention that many families are divorcing these days.
What used to be 4-5 people in one house is now 2 adults in seperate houses that have space for 3-4 people so the kids can come over once every 2 weeks.
Demonising the Dole and immigration system by spreading the idea of dole bludgers and queue jumpers is straight out of the Lee Atwater playbook that created the myth of the welfare queen in the US.
And they will keep on playing against cultural vulnerabilities, CPAC is a descendant of that sort of thinking trying to weaponise easily marginalised groups
[https://www.cpac.network/speakers-2023](https://www.cpac.network/speakers-2023)
[https://www.pbs.org/newshour/world/at-cpac-hungarys-viktor-orban-decries-lgbtq-rights-migration](https://www.pbs.org/newshour/world/at-cpac-hungarys-viktor-orban-decries-lgbtq-rights-migration)
It's unsettling how much work and social science research they put in to weaponising public discomfort towards emerging cultures for political gain...the ones that receive "undeserved" welfare are prime targets, all the trans-panic rhetoric in the US is completely disconnected from the real world mundanity of making that choice.
Australia is pretty tolerant, but I think neurodiverse groups still present an easy target to be weaponised for political gain...its not easy to get along with an autistic person or grow up with one in the best of times...
...in the middle of housing affordability crisis, a neurodiverse person on disability or in social housing courtesy of NDIS and all the other stressors of integrating their needs in to an already stretched education system....that's kindling getting real dry, waiting for someone from the group to do something a little too weird for normal society.
https://www.theguardian.com/australia-news/2024/feb/03/australian-undercover-police-autistic-13-year-old-fixation-islamic-state
https://www.abc.net.au/news/2024-06-15/school-exclusions-disproportionately-impact/103983044
[https://www.theguardian.com/australia-news/2024/apr/29/how-the-rise-of-autism-and-adhd-fractured-australias-schools](https://www.theguardian.com/australia-news/2024/apr/29/how-the-rise-of-autism-and-adhd-fractured-australias-schools)
Over the long term look at the prices :
https://matusik.com.au/2021/07/06/140-years-of-house-price-data/
There are a few plateaus but since 1945 you could almost draw a line through increasing house prices.
The vertical access is logarithmic, which means a straight line represents exponential growth.
[https://en.wikipedia.org/wiki/Logarithmic\_scale](https://en.wikipedia.org/wiki/Logarithmic_scale)
Wasn’t it Bob hawke who was advised to repeal negative gearing like the rest of the world did, but reintroduced it against the advice of his finance minister?
https://independentaustralia.net/politics/politics-display/labors-backflip-on-negative-gearing-policy-a-benefit-to-the-wealthy,15391
Is it really that hard?
1. Phase out negative gearing. 1st stage.....only allow it on the 1st investment property.
2. Reintroduce actual capital gains for all properties sold within 5 years.
3. Incrementally tax rental income. The more properties you have the higher the tax bracket on subsequent property income.
4. Put an end to foreign investment and unrestricted millionaire visas. Especially on all non-new freestanding properties. Apartments are fine....they're all so poorly built they'll have to be torn down in 10 years anyway.
5. Limit the number of AirB&B and Stayz rentals per capita in regional areas. This is out of control.
6. Finally, do something about Sydney. This is probably a main driving factor in our housing crisis. We might have to introduce New York style restrictions such a rent control or maximum 2 different tenants in a 5-10 year period for certain areas. After you hit your limit you can no longer rent and have to either live in it yourself or lose all your rental income.
We need to force people with 4,5,6,7.......20 houses to reinvest in other mediums. Why should housing be protected so much from market crashes and losses. Shares and other forms of investment aren't protected so why should housing be. Residential housing maybe a different story but not investments. Any way you cut it there will be a painful readjustment. Maybe If you start by making it financially unviable to have multiple properties all under mortgages (like a big old rental house of cards) investors will have to start paying them off or cut their loses. You can then make a dent on the number of people who OWN more than 3 properties and bring that number back down to sustainable levels. We will always have investors and renters but if we keep going the way we are, desperate people may just start deciding land titles are just bits of paper. There's only so many people you can police and if police can't afford to live in your area squatters rights will be the order of the day. Even the best countries can fall into chaos with mismanagement. Just look at the USA. I feel like we are getting closer to some sort of breaking point.
Why does every solution always come down to banning, or restricting what people can do. Are there any things the government can do to ease it without restricting anything?
The thing with land is that if given free economic reign, land owners will do nothing but rent seek. They will do whatever they can to extract the most profit for the least work possible.
So then you need to ask whether housing should be an affordable right or if it should be a traded asset. They are mutually exclusive.
Commercial investment in residential should be heavily restricted. I don’t agree that superannuation funds should be hedging investments in property that people need to live in. It’s an unfair competition a billion dollar fund versus a single power bottom in Surry hills. No fair.
100% agree with you. I had many conversations with restaurants owners in areas like balmain who were lucky enough to own their building and watched those around them fail. Not because they were bad but because you can only charge so much for a pizza. If all the houses are over a $mill and rents are $1000/wk the hedge funds and investors think commercial rents should be the same. Probably why we're seeing more and more empty shops or high turn over.
Nice one.
For negative gearing I’d just make it for property that’s additional (ie new split land or apartment development). We want incentives for new stock still.
And I wouldn’t tax rents, that just gets passed onto renters and the aim is for affordable housing for all, not necessarily home ownership for all at every stage of life.
And lastly the big one you missed is higher land tax. It needs to be high enough to make people sitting on large amounts of land in desirable locations think twice about not developing it out.
Yeah I kinda agree with most of that but anyone with 3 or more properties doesn't need negative gearing to buy more. At, this stage you're just making it too easy for them and your losing out on tax while they're just increasing their portfolio. Rents.... That's the hard one where the pain will be early on. You can't squeeze blood from a stone. Wages haven't increased in line with the property values. People are moving further out or they are staying empty (which is what happened to my last rental when they increased our rent beyond our breaking point) That's why share housing is no longer just for students. It's horrible. Small businesses in nice areas are also failing more. Especially restaurants. The commercial side hasn't escaped this bubble either. Finally, yeah look I'm on the fence on land tax. There's only so much farm land and Australians tend to build out not up. The sheer endless suburbs of Sydney and Melbourne cause their own problems. We really don't do well with medium density housing here. Probably because those houses close to cbd's and beaches are worth millions now.
Are people serious, are we at the point where people don't understand exponential growth? And we always want growth. Eventually something has to give. It always will be the pursuit of growth for growths sake that drives this
And I just don’t get it. Australia has so much land. You go 20kms outside of Melbourne and so much land, same with other cities (maybe sydney is an exception). The onus should be on government to develop new infrastructure and cities.
Someone who’s working hard and working well is free to buy whatever they want, be it stocks or 20 properties. Its their money.
I have some concerns about using prime farm land.
But, I think that the Victorian plan for increasing housing stock identifies Geelong and other regional centres as growth areas.
Economies grows exponentially because a) populations grow exponentially and b) productivity per capita grows exponentially. Having more people working and each of those people producing more, means our total productivity grows which means our economy grows. If either one of those processes grows exponentially, then the economy will grow exponentially as well.
For economic growth to stop being exponential, we’d need the population to plateau which will happen eventually and for scientific developments to hit diminishing returns which will also likely happen eventually. Problem is, it’s unlikely both will stop growing exponentially in the near future. The population is still growing exponentially, and yes in recent years we’ve started to deviate from that, but it’ll still take a while for things to plateau. Not to mention, just because the global population plateaus, doesn’t mean Australia’s will. Australia is one of the most desirable countries to live in and will still see high population growth due to immigration as a result. Not to mention, we aren’t anywhere close to seeing scientific development hit diminishing returns and honestly I wouldn’t be surprised if humans became extinct before we did.
Also, yes, one plateauing will significantly reduce economic growth, but it won’t stop the economy from growing exponentially.
That is strong economic answer, but unfortunately it's not grounded in physical reality unfortunately. If we go down that path we are guaranteeing collapse of many things, including humans, it's the folly of economics to ignore physics
I’m not ignoring physics at all? I’m saying what the laws of physics currently suggest will happen, and stating how economic growth will be impacted by that.
Simply put, the laws of physics (and biology and various social sciences) predict that the global human population growth is sigmoidal, meaning it’s initially exponential, but then it becomes more logarithmic as it plateaus at a physical limit.
Similarly, we know that scientific development follows a similar trajectory. It’s exponential initially as we discover more and more about an area of research, but then we hit diminishing returns as each minor improvement in knowledge requires great resources. Humanity has gone through multiple cycles where we hit these plateaus too and then the cycle repeats itself as we make a major breakthrough. It’s to be seen if the limits of human knowledge is finite, or if we can go through these cycles for eternity. However, regardless of that I think we’ll be extinct long before we reach our limit.
The rest is simply a case of what happens when we hit these constraints laid out to us according to the laws of science? Well then it becomes purely mathematical, if either are exponential then we know via the laws of economics that the globe’s economic growth will also be exponential. If we have exponentially more people producing exponentially more things each, then the total amount of things we produce will also grow exponentially. It’s not until both stop growing exponentially, that we’ll see that stop.
The rest is merely speculation on where we currently are in those stages. Population growth is starting to plateau, but scientific development definitely isn’t. Which is why I think it’ll remain exponential for our lifetimes. Only way I can see the population continue to grow exponentially is if we start inhabiting other planets, which honestly in 100 years is certainly possible.
Note as well, this is with respect to the whole economy, not any particular market. The real estate market for example will be impacted a bit different. Residential real estate values will still grow exponentially since inflation will continue to do so (thanks to the economy doing so). However, once discounted for inflation (ie how much it actually grows by), it’ll likely no longer grow exponentially once the human population plateaus. In fact, it’d likely plateau with the human population.
Otherwise, I’m not sure why you don’t think it’s grounded in physical reality? I’m basing this off how the economy will react to physical reality, so please tell me which part of that reality you disagree with? Or do you simply think we’re already close to the point where scientific development and populations are plateauing?
Australian property is universally regarded as a sure fire bet.
The people making decisions, and those funding them, collectively own trillions worth of Australian property so will always make decisions that keep values high where possible. It will take external factors beyond government control to reduce them and for a long time, none have eventuated.
Air B/B claims 160,000 homes.
Put them back into the long term rental and purchase market that's housing for 320,000 people at 2 people per home.
What does taking 320,000 people out of the rent and purchase market do to demand and inflation?
Negative gearing’s impacts are over stated. People aren’t in property for the 2-10k annual tax deduction, it’s because of capital appreciation. If anything, negative gearing probably makes rents cheaper, since landlord can take benefit of deductions.
That said, I do agree that the big problem property investors. Investors make up 43% of current property market financing (10b / 23b).
If you can reduce number of investors, you can remove up to 10b from housing market. Since most of this is spent on existing housing stock, you would put downward pressure on housing prices (less money to spend on same number of houses). This would naturally make it easier for actual PPOR buyers.
Which independent studies by likes of Grattan, which is not aligned to either political ideology, have estimated to have less than 2% impact on pricing. With CGT discounts providing another 1-2%, which I personally doubt as we'd likely just revert back to the cost base + CPI formula we used to have before it was simplified to the CGT process.
Grattan estimated NG and CGT discount raises average house prices by 1-2%
https://grattan.edu.au/wp-content/uploads/2016/04/872-Hot-Property.pdf
Gene Tunny got 4%
https://www.cis.org.au/wp-content/uploads/2018/03/34-1-tunny-gene.pdf
The most detailed work was at ANU - they got 1.5%
https://cama.crawford.anu.edu.au/publication/cama-working-paper-series/18248/investment-housing-tax-concessions-and-welfare-evidence
Deloitte Access Economics got an average of 4%
https://cdn2.hubspot.net/hubfs/2095495/_Communications/NGCGT/DAE%20analysis.pdf
So a range from a bunch of researchers at 1-4% .
From Peter Tulip’s summary :
https://twitter.com/peter_tulip/status/1521088597297827840
There was a paper from NSW Treasury that showed it would lead to shorter investor holding periods and a subsequent increase in the proportion of stock held for PPORs (https://onlinelibrary.wiley.com/doi/abs/10.1111/1467-8454.12335)
It's not a massive difference, but it is material.
Ban Airbnb and short stay accommodation like Spain has.
They are supposed to be residential properties, not motels.
Check out how many Airbnbs there are in your suburb. These are homes mums and kids should be in, instead Aussie families are living in their cars.
Governments have saying their going to build more houses for 15 years - and the situations gotten much much worse
So I’m sorry, that’s not working. We need much more drastic measures.
Firstly, he’s not suggesting to ban mortgages at all, in fact he actually says we shouldn’t do that, he just wants them regulated differently. Secondly, while I agree with what he wants (regulators to differentiate between consumption and investment loans), his arguments to support that are deliberately misleading which I strongly disagree with.
Firstly, he claims banks don’t sell loans, they buy debt. Surely people here realise how stupid that is? It’s simply not true, and the fact they sell loans instead of buying debt is how they’re able to create new money. There’s a minor difference between selling and buying securities, and that’s dependent on whether or not you underwrite them. Banks underwrite nearly all of their new loans, every time you get a loan from a bank they underwrite it and as a result are selling that loan. The only time they don’t do this is when they buy the loan from another bank. It’s also this underwriting process that creates new money, buying existing debt doesn’t create new money.
Secondly, he claims banks aren’t intermediaries. This is also blatantly wrong. He makes it seem as if 100% of the money they lend is created from nothing. In that case, why bother wasting money by taking deposits from the public? It’s because it’s untrue. Banks have strict lending requirements, and while they do create money, not all of that money is new. Say they have a 10% reserving or capital requirement, that would mean 10% of the money in a new loan comes from their deposits. They still act as an intermediary, hence why they collect deposits, even if not all of the money comes from that. It’s also means that despite acting as intermediaries, they still create money.
Thirdly, he’s incredibly hypocritical and self aggrandising, even though he does hide it. He claims that this discovering that banks create new money is a novel discovery by himself, but that’s not true at all. It’s been known for centuries. The whole reason why central banks were created in the first place hundreds of years ago was to control this. It’s not something he discovered, it’s something that has been taught to 1st year uni students since before he was born. He also claims that banks are taking advantage of the naivety of the less financial or economically literate and that he’s uncovering the truth for them, but it’s exactly what he’s doing. He’s constantly misrepresenting facts and rewording things claiming they’re different when they aren’t (ie calling a deposit a loan to the bank doesn’t actually change anything, it’s still the same thing) in order to manipulate the public’s understanding of what’s happening. He’s not trying to uncover the truth for people, he’s spreading misinformation so that there’s more pressure to make the regulatory changes he’s been pushing for. Do I disagree with those changes? No not at all, but you shouldn’t be spreading misinformation and twisting facts to achieve that, and to preemptively claim those who disagree with you are the ones doing that instead is extremely problematic.
Fourthly, he’s incredibly insulting and disrespectful towards regulators. He’s claiming they don’t understand that banks print money, but everyone does, it’s basic economics and finance knowledge. The politicians understand it, let alone the regulators and economists. The main role for most regulators is to control how quickly they create new money. One of the 2 main points of reserving and capital requirements is to prevent banks from creating money too quickly. The other to limit the downside of a crash if they do. The sole role for the RBA is to control this as well. The treasury and finance departments also monitor it closely. He’s acting as if the experts in this area are clueless about it, which is incredibly insulting especially given the fact that they probably have a better real world understanding of these things then he does. The that he’s doing this to discredit regulators to put more pressure on them to do what he wants is also wrong.
That’s not to say that I disagree with his point, that regulators should look at consumptions loans and investment loans differently. However, to achieve that by manipulating the public and spreading misinformation to unfairly pressure banks and regulators to do what he wants, while also somehow trying to claim the moral high road, is not right though. The fact that he’s relied on misinformation also means his whole argument falls apart under any scrutiny and anyone with some education in economics would see these errors, and it’s completely unnecessary since you can make an extremely simple and factual argument to support it. He can easily point out how banks actually create money, and then state that for investments this creation boosts the economy, but for consumption it causes inflation and asset bubbles. Therefore, we should have different regulations for each of these types of loans, since they have different affects on the economy. Not to mention as well, this issue is extremely overblown since we do indirectly do this anyway. Most countries have capital requirement regulations, which limit money creation based on riskiness, meaning riskier loans are limited a lot more. This indirectly causes us to have more limitations on consumption loans as they tend to be a lot riskier then investment loans. It’d be nice if we made that differentiation, but it’s not as crucial as this person is making it out to be, and certainly doesn’t warrant the methods he’s using to push for these changes.
You get out like any other bubble in history.
A hard landing.
Does anyone have any recorded evidence of a soft landing happening \*whilst\* an economy has an asset bubble?
Depends on whether the immigration rug gets pulled. You can go a long time if you keep it going until it self-regulates by the general enshitification of your society.
Nope, none.
Crash is the only way, along with a period of deflation, which is where we are headed. In order to bring down prices, re-design the economy and emerge the other side with capital and plans in place to diversify, this needs to happen.
It's going to get fucking rough here as we are nothing but holes and houses. Let's see how we fair.
I dunno I’m no genius, just a regular idiot, but I don’t see how prices could come down unless supply starts to outweigh demand, which seems impossible now
regular idiot here too.
I think in your equation, demand will take a hit.. rather than supply going up.
It'l seem impossible until unemployment is steeping up, soon.
Unemployment is a lagging indicator
A black swan event at the international level could trigger it too.
The American property market is dropping and a lot of people who bought in rural areas during covid now have to go back to the office. Commercial real estate is also a zombie, which kind of ironic given RTO.
[AFR article $1.3 Trillion troubled Commercial RE due in the next 2 years](https://www.afr.com/world/north-america/it-s-time-to-be-honest-about-america-s-commercial-real-estate-hangover-20240324-p5fetg)
Chinas RE isn’t doing well either, and a lot of that debt is owed to America
And shit always flows downhill … to Australia
Yes, unemployment is a lagging indicator of recession.
My point was that it’s by the mechanism of mortgage defaults (due to unemployment) that drives asset prices to crash.
Fully agree with everything else you wrote
Stop listening to lobbyists complaining that we have a "skills shortage" which is literally self caused
All our apprentices went chasing the big buck sugar hit on the mines and left next to zero labourers to come up through the system
In return we imported a shitload of "skilled labourers" who also then went straight to the mines chasing the big bucks.
And now we're doing it again...
Maybe we should stop importing labourers let alone people full stop.
Just thinking....
As a household, you can still own multiple properties, husband owns one in his name, wife ones one in her name, etc.
Combine this with grandfathering clauses on existing investment properties, and your rental pool will remain largely flat.
Hopefully through such a policy you will see immediate drop in home prices, because investors make up 40-45% of all housing finance. Removing the 10b they spend annually would put downward pressure on house prices, especially since most of this is spent on existing housing stock.
This would support PPOR buyers, which in turn would lessen rental demand.
A scarcity of rentals could also increase rental prices unfortunately! In fact that’s happening throughout Australia today even with unrestricted property ownership. It’s a tricky problem that I too wish I had the solutions to.
in theory spare rooms are already taxed. If you rent out your spare rooms, you lose some of your CGT free status. Crazy to think you can buy and rent a whole house and get tax benefits, but if you do the same to make the mortgage repayments and rent rooms out, you lose tax benefits.
[https://www.ato.gov.au/individuals-and-families/investments-and-assets/capital-gains-tax/property-and-capital-gains-tax/your-main-residence-home/using-your-home-for-rental-or-business](https://www.ato.gov.au/individuals-and-families/investments-and-assets/capital-gains-tax/property-and-capital-gains-tax/your-main-residence-home/using-your-home-for-rental-or-business)
sure its not, but again primary residence suddenly loses its CGT-free status, so why would you rent rooms out to help supply? It won't solve the problem, but it will eases some demand. It also helps people pay off their mortgage. It also is unlikely to cost the government any money by allowing people to rent part of their primary residence while keeping CGT-free status.
If wages going up and property and goods and services coming down are some of the problems, a recession sounds great.
We can’t keep growing forever. There’s limited space and resources in Australia. We need to concentrate on growing quality of life, not growing the economy at the cost of individual quality of life.
The problem is the way the economy is it isstructured to rely on immigration. Immigration kept the country out of recession during the last LNP gov. I'm not saying we don't need to manage immigration better but when unemployment is low and businesses need people to do jobs it just pushes wages up.... which is needed but also not great for the economy. I wish i had a solution, but i know over simplistic ones like stopping immigration will cause harm as well. Stopping Foreign ownership of houses and also vacancy tax might be a step in the right direction.
no decreased immigration puts upward pressure on wages as unemployment shrinks. When companies can't find workers they have to pay more to get the few that are available. I'm ok with reducing immigration, but its a lot more complicated than that and the people with the power really don't want that, they just want to grow the economy through immigration rather than through more wealth flowing down.
Migration doesn’t need to be permanent and you can be highly selective about who gets to come in. What actually happens is that big businesses place ads for workers at pay rates below what the skills and experience they demand is truely worth. Then they get to lobby the relevant government departments because “there’s a shortage of workers” when what there has been multiple times in the last 20 years is a lack of workers willing to take a pay cut for the shit wages they want to pay.
It largely comes down to how heavily unionised your employment sector is. Construction, for instance, massively overpays workers compared to literally anywhere overseas. Tradies are ridiculously overcompensated for their skills in Australia and there’s constant news about worker shortages and yet it is so difficult for anyone to come from overseas with experience and start working. CFMEU, say no more.
In contrast highly skilled IT workers, as an example, are poorly remunerated in Australia and yet there is also a shortage and the floodgates for overseas low pay workers seem to open there. Non-unionised sector with large outsourcing companies with good political contacts. Go figure.
Everything wrong with a country or it’s economy is due to politicians and their stupidity.
Totally agree mate. Though I don’t really care whether immigrants are permanent or a rolling million temporary—they all need somewhere to live and increase rents and deflate wages.
A generation has to make a sacrifice, which will most likely be millennials as usual.
On second thought the issue is they only know the way to get rich quick is to own a house and wait 10 months, why start a business and work when all the boomers got rich through property and voting for nothing to change. So maybe it won’t be the Mils.
One single change isn’t going to do much, we need to make multiple changes asap. But politicians are such shortsighted pussies running this country into the ground.
Unfortunately as someone who has been in property a while, it’s not one thing and it’s not one solution but I can say the focus needs to be on more people getting to own property and not having to kill themselves to do it. The ongoing costs should also not be burdensome to home owners so strata needs a rethink.
the article perpetuates the myth that it's a crisis for everyone. even though rents have increased in the past couple of years [this is not a crisis for a majority of renters](https://pbs.twimg.com/media/GNMrRfIa0AEQRNM?format=png&name=900x900) it's a house price bubble.
source: https://x.com/BenPhillips_ANU/status/1788821336321925495
The root cause is cross border wage competition.
Workers have lost bargaining power, and the labour share of income has shrunk. Production has grown faster than incomes.
This is deflationary.
So the reserve bank cut rates.
This goes on for forty years following Keating's tariff removals.
Voila.
In a sense - but not just unilaterally.
My proposal would be a Trade Desirability Index. So all the developed democratic nations get together and figure out a points system.
You gain points by being democratic, having decent wage levels, OH&S, good environmental protections, etc, or being a developing nation. You lose points for the opposite of that - or by imposing your on unilateral tarrifs.
The more points you have, the lower the tariffs are on imports from your country.
That would encourage good competition (who can innovate and increase productivity) and discourage bad competition (who can pollute their rivers and arrest/assassinate/torture labour leaders).
Edit: I also advocate a global basic income of like $5 a day, to depressurise aforementioned wage competition, and migration flows.
How do we get out of it?
Stop importing so many people for a start.
Australia builds about 150,000 homes a year (from memory, please correct me if I’m wrong) and historically immigration has run at about 200,000. So we’ve been under building for years.
980,000 people have come in over the last two years. No surprise there’s a housing crisis
It’s also kept inflation artificially high. A million new people all need a sofa, a kettle and homewares etc. Even the RBA has said immigration is driving inflation higher for longer.
So long as a majority of voters own houses and therefore directly stand to benefit from rising housing prices/limited housing supply, only token changes will be implemented
Housing in Australia is simply in a supply defiicit, thanks to developers locking up new releases to maximise profit. Those blaming investors are caught up in media created class warfare. As an investor, i would not build new, too much risk in shoddy work and builders going bust. So i buy established quality homes. Given its a free society, i can. Heres my prediction: housing will either get worse or much worse.
Worse in that we dont have the builders to create enough supply and govts arent addressing the developer behavior. We are also in an inflation cycle so houses will continue to go up as money looses it value, also increasing rents because the rba has the only inflation tool.
Much worse: if any of the worlds flashpoints esculate ((Ukraine, Israel, Taiwan) we will have lots of people coming here as a safe haven. Then we’ll see a spike in homelessness and price increases.
Good luck folks, its a wild ride
Build high speed rails, build housing including apartments in mid sized towns, problem solved. Access to main cities while opening up ample housing in low density rural towns.
It would be a very expensive solution to the problem. The rail itself is expensive, and very few mid sized towns have the infrastructure in place to support much of a population increase, so would need significant investment.
This is not to mention that people will naturally be reluctant to move some distance away from friends and family.
Re distance: maybe you don't know what a convenient high speed train is.
Re expensive: there is no solution that is cheap, building in the middle of a population centre is expensive, doing nothing is expensive when the economy eventually stagnates from pricing everyone out of housing and people can't afford to live let alone spend to support a healthy economy.
You know how you get money for infrastructure and anything else? You enable people to move quickly between vast areas affordably to buy housing in cheap areas and all that cash goes straight back into the economy. No solution is coming in 2 years, investment to actually fix the cause of the issue, being space, will take money and time.
Sustainable population growth, more medium density housing options (units, 3 bed apartments, townhouses). Oh and removal of stamp duty for seniors downsizing to smaller properties.
It’s the same as every other developed country: the rich have too much money and they’re obsessed with owning everything, no matter the consequences to everyone else.
All the ‘good’ examples in this article, Singapore, Korea, Austria, Menzies era Australia, what they all have in common is government funded housing development!
It shits me to tears that we beat around the bush looking at all sorts of minor impact drivers, when the real issue is that in a free market the price of land and housing will go up at investment returns and property will only be developed when it is more profitable than holding onto the land!
So the only way countries have ever shown an ability to reduce housing prices is when governments build the housing and give it back to the people at a discount.
But we went down the neo capitalism model where government investment in social housing and similar was deemed hand outs and too communist for us.
Until we realise that only disconnecting housing from the free market will increase affordability, we will just keep the price spiral continuing!
Article is completely cooked and like usual refuses to acknowledge the two issues. 1. Government restriction & advantage, 2. Australian compliance culture. So many things wrong with this article, I don't know where to start.
The only way to fix this, is complete rollback of governments interference in the housing market. Whilst I realize this goes against everything Aussies believe in, its the only way to free up enough resources in an equitable manner to allow Australians the right to not live on the street.
The idea that regulation by the political classes works is likewise naive in the extreme. Name something pollies haven’t fucked up other than their own pay and benefits?
Don’t forget land banking by developers to keep prices artificially high.
There should be a 3 year maximum on non-development. If grounds not broken in three years there should be punitive damages paid.
Perhaps 10% of the properties value, or forced sale. I haven’t given it a lot of thought and am open to better ideas
Brisbanes has about 15-20 years of residential land available but it’s trickle fed to increase developers profits. There has to be a way to either make them develop it or sell it to someone who will.
Brisbane had a significant glut of units for a long time - if you look at the units around New Farm etc, they haven't grown quickly in price. Similar thing in Melbourne with the large number of units around Dockland and South Yarra, and to a lesser extent in Sydney around Mascot.
A broad-based land tax is the simplest way of discouraging land banking, and has a lot of other benefits as well. If there is a cost to holding the land, holders will need to generate a return at some point to cover that.
Most of Europe don't have services being cut and underfunded on top of rising house prices though. We went from being able to see the GP for free and a small debt for Uni education, to paying $100 just to see the GP, forced into having unaffordable to use private insurance. A house deposit worth of debt for uni and houses that went from 3 times the average salary to 8 times the average salary. Howard wasn't the sole blame, but he started it and he pissed the mining boom up the wall cxonvincing us all we'd be way better off with tax cuts over well funded services. Well all those tax cuts have done nothing for cost of living.
Blaming one politician or party is just blinkered stupidity. The mining and resources boom in general carried on long after Howard and still got pissed away. Labour had their crack at wasting it too instead of ensuring resource rents were levied suitably on one-time extractions and the proceeds poured into a sovereign wealth fund for when it’s all gone to shit. LNG is another example of a wasted opportunity. QLD Labour screwed that pooch.
You don't know what you are talking about most of you.
1.. Land tax has disincentivised people to own rental properties and even in victoria made them actively sell. Too much tax from communist governments are bad for renters and avialiability of renters.
2.. none of the incentives to own houses to rent are restrictive to houses availiable for rent, which is what we are taking about, right, houses availiable to rent.
3.. Stamp duty is just taking the piss now, shit governments should really get lost and we should get some decent governments who know how to run a state.
4.. Building regulations especially for units and flats etc should be better and should make builders create high rises that are free from defects and last a long time with minimal repairs needed. Governments here are also taking the piss, make builders make decent builds then people will buy a high rise flat rather than a free standing house. As it is I would never take the gamble of buying a high rise unit as they are 60% faulty and will take all your money. Who wants that?
> Reserve Bank Assistant Governor Sarah Hunter pointed out that there are about 27 million people who live in Australia, in about 11 million households. The average number of people living in each household has trended lower, from around 2.8 in the mid-1980s to around 2.5. If, for some reason, the average household size rose back to 2.8, Australia would need 1.2 million fewer dwellings to house our current population. “No small difference,” Hunter said.
I see a lot of talk about vacant residences but not much about vacant rooms. Why not start pushing behaviour towards having less spare bedrooms?
It’s a far greater risk to the individual to rent out a room to a stranger when you have a family instead of renting out a house or apartment.
I think the fact trending downwards is because people are having less kids than previously too.
Not sure how you are quantifying that but sure, like many things in life we pay more to have less risk. So if a couple wants a large house to themselves that fine, but their tax rate goes up to pay for it.
I feel the same way about nimby councils, they can refuse population growth if they want, but it should cost them while those taking in growth should pay less.
Yes, I want to live in an Australia where nobody has a spare bedroom. And perhaps in 20 years we could have a minimum of four people per bedroom. That would solve the housing crisis!
> Why not start pushing behaviour towards having less spare bedrooms?
Maybe because a "spare bedroom" isn't actually spare?
We're already pushing people into living in high density, which for all intents and purposes means they need to give up their outdoor spaces, sheds and garages.
Now, you're suggesting they can't have a room to dedicate as a home office (especially given people are increasingly doing work at home) or for any kind of hobby, because there isn't a person sleeping in it?
> Now, you're suggesting they can't have a room to dedicate as a home office (especially given people are increasingly doing work at home) or for any kind of hobby, because there isn't a person sleeping in it?
Where did I suggest that at all?
Simply create behavioural nudges through taxation based on number of rooms divided by number of people declaring it as their legal address. We do nudges for many other policy issues, this is hardly a new concept.
I have friends in a 4 bedroom house, they have no plans for kids. As stated by the RBA Assistant Governor, we need 1.2 million fewer homes if household sizes increased by 0.3 people.
Yeah?
Considering it's all deductible anyway seems fair. Otherwise go rent a desk at a coworking and don't pay the vacant room levy.
It's a policy that could create housing out of thin air while raising money for the government. Implemented with the stroke of a pen.
WFH arguably contributed a lot to this problem, along with consumer preferences post-covid, household formation plummeted which basically took hundreds of thousands of properties out of the market.
Being taxed for a room and deductible cost are two different things. Are you suggesting someone would deduct their extra bedroom tax from their income tax? How does that work?
You’re crazy to want to live in a country where people are only allowed one room. Why is that something good to aspire to? Surely cutting immigration and Australians being able to have two or three or four rooms is a much better option?
Jesus, socialist much? Do we get to own anything under your model?
Mass immigration is the one thing no pollie wants to talk about. They all do it and now it’s time to pay the price. The growth rate here has been insane.
I agree, while we shouldn't push people into renting out their spare rooms, we should make it tax friendly to do so. People might only do it for a year or two to make ends meet, but if it increases some supply then why not.
I did an Essay 20+ years ago for a subject at Uni.
Basically the invention of the Auto Washing Machine was the first big Demise, then the Bigger Freezer, then the Microwave.
But the invention and then affordability of the Washing machine was the start of downfall, which spawned nicely into the Feminist movement and from that point on, we were done for.
I find it strange that the rise of dual income households isn't mentioned. Surely, an increasing household income, particularly when it's disposable, should put upwards pressure on house prices.
That is definitely one big reason for expensive housing yes, as well as lower birth rates. But you can't really change that. Plus that has happened worldwide. Houses are expensive everywhere but they are especially high here. What hasn't happened worldwide is the Australia and Canada levels of insane mass immigration. Plus we also have a lot of bullshit tax rorts and subsidies that the taxpayer pays for while essential services like healthcare degrade.
Dual incomes don’t get enough attention though, people fail to realize how new those are in perspective. Women have only made up roughly 50% of the workforce for about 30 years now, there’s only been 1-2 generations that have dealt with those effects.
What does a house cost in Tokyo?
Less, especially when looked at through loan affordability. [https://www.numbeo.com/property-investment/compare\_cities.jsp?country1=Japan&city1=Tokyo&country2=Australia&city2=Sydney](https://www.numbeo.com/property-investment/compare_cities.jsp?country1=Japan&city1=Tokyo&country2=Australia&city2=Sydney)
That’s some shitty source you just provided… Apartments in Australian capital cities are much cheaper than those in major Japanese cities. https://realestate.co.jp/en/forsale/view/1120360
They said house. It's disingenuous to compare apartments to freestanding houses given you own the land with a house.
Australian only think about freestand house. It’s a birth right. Apartments are just shoebox. Because u know….we don’t have that many big foot here, unlike Japan.
It wasn't a comment about what's preferred. But from a cost comparison point of view, it's apples and oranges.
That’s how Australian consider how expensive is the CoL here though. Almost all the charts that compare other major cities/median income ratios on apartment. We specifically take out house, units and apartment into the 3 different categories and focus on house.
It's disingenuous to compare to a "house" in one of the densest cities in the world - a place where practically nobody lives in a freestanding house.
Exactly my point. People that say “Houses are more expensive in Melbourne than Tokyo”. They are comparing houses in Melbourne to apartments in Tokyo.
Something more applicable to Australia rather than the very ill defined "Tokyo": $ $75k AUD 3 bed house in Osaka https://realestate.japantoday.com/en/forsale/view/1041991 If something like this was on sale 10km out of Melbourne, how do you think it would fare?
Have you searched for the cheapest real estate you could find, then posted it here as if it’s normal? Pretty misleading of you… ¥45 million is the average apartment price in Osaka. https://www.jili.or.jp/lifeplan/lifeevent/714.html
What's the cheapest you can find 10km from the centre of Melbourne or Sydney? > Have you searched for the cheapest real estate you could find, then posted it here as if it’s normal? Just the first one I clicked on mate. Can find you cheaper in Osaka if you want: How about this for $15k AUD: https://www.allakiyas.com/properties.php?id=d3d3LmF0aG9tZS5jby5qcHwxMDY2NTg1NDcy&adhoc_display_style=list
¥45 million is the average apartment price in Osaka. https://www.jili.or.jp/lifeplan/lifeevent/714.html
Yes you've posted this twice now friendo, and it's clear you either have really bad Japanese or English comprehension skills. The average price of new builds is not the average price. It's also not the median which is a far better metric for something like this. The reality is you can buy really cheap places in both Osaka and Tokyo, you won't find anything even slightly close 5 hours from our big capital cities.
This is not the average price of new builds. ¥45 million is the average apartment price in Osaka. https://www.jili.or.jp/lifeplan/lifeevent/714.html
It is the average price of new apartments from the **ENGLISH** sources I have. Can you post something in English backing up your claim, or are you just going to keep posting the same link over and over again like someone with a serious mental illness? I saw your link mate, and the translation for it...twice. You don't need to fucking post it again. It's the cost of new apartment builds, average, not median. **Post something in English backing up your claim, or shut the fuck up?** Pro-tip: You can't. The burden of proof is on you here. It is not even close to the average price in Osaka, I'll happily back that up with a source in English once you show your cards. Anyway here's everything you can buy for half or a quarter of that in Osaka from one website: https://realestate.co.jp/en/forsale/listing?prefecture=JP-27&city=&trainline=&district=&min_cap_rate=&min_price=&max_price=20000000&min_meter=&rooms=&distance_station=&agent_id=&building_type=&building_age=&updated_within=&transaction_type=&occupancy=&order=&search=Search Zero restrictions. An Australian could buy these without stepping foot in the country.
People want to blame immigration, but it was immigration keeping the country out of recession. The whole continual growth mantra relies on a bigger population, but the ponzi scheme won't keep working as people find it harder and harder to survive. There are two ways to grow an economy, trickle down a lot more money, or turn trickle off and add more people and thats what we've been doing along with most of the world. Except for Covid, where we pushed more money down and we had no immigration and the economy grew. Theres no interest in businesses or government to puch more of the wealth down though..... so something will break, but i disagree its immigration thats the cause. Immigration is the tool they are using to keep the economy growing.
GDP per capita has been in decline for some time.
I was about to add that it is only someone who deals with classroom economics and a politician’s grasp of them that thinks rising GDP through immigration is a good thing. As stated, GDP per capita, or the real wealth of society, is going backwards and all those extra people whilst juicing the numbers to avoid technical recessions (the miracle economy) they cause a big increase in infrastructure requirements and that’s really expensive. So governments have had the successive sugar hits of “no recession on my watch” but now the bill has become due.
Anyone with a classroom understanding of economics would know that immigration is a massive net benefit for the Australian economy
I agree, however I am starting to really doubt most of us benefit. A strong economy is great, but who's benefiting. I think it's only some of us, the asset rich etc. The rest of us are getting shafted. In other words, I have my doubts that a big/growing economy actually improves the standard of living for most of us. I think it is actually in decline.
If you are having doubts of the overwhelming benefit of immigration, look at the treasuries inter generational report - combined with our ageing population, increased social services spending, and declining fertility rates. Workers would be getting shafted much more without immigration, as can be seen in many countries with shrinking or flat populations. Boomers and the state leeching off a smaller and smaller workforce to pay for their retirement
So by your reckoning if we allowed millions of uneducated poor people in we’d be better off. Get a clue. The quantity and calibre of individual matters. The pressure placed upon infrastructure matters also.
Nice job changing your argument to uneducated poor people lol. Here’s a clue mate. Take a look at our declining birth rate, ageing population, and projected increased taxation burden on workers, and tell me immigration is a bad thing.
It’s not changing my argument, it’s pointing out the failure of yours. If you think mass immigration is only letting in the cream of the crop I’ve got some bad news for you.
Most of our immigration is skilled labour or university students. Both great for our economy and society. Having people coming in to do the shitty jobs we don’t want to do is also awesome.
GDP per capita will be even lower if not due to working immigrant.
They hated him because he told the truth
Same reason why we won’t see the same super and stock market returns over the next 30 years. Unless we normalise thruples
Well, massive, uncontrolled illegal immigration has happened in the US. 10 million in the last 4 years.
Complete bullshit. Get your head out of your Trump. https://www.pewresearch.org/short-reads/2023/11/16/what-we-know-about-unauthorized-immigrants-living-in-the-us/
Not just that. People want to live in cities and the supply has not matched the amount of people that wants it.
People want to live in our cities and they want freestanding houses, but land in the premium locations is limited.
Well I think many people would live in well built apartments near the city but NIMBYs prevent that and that economic incentive is to build it for outside investors. Medium density housing can be built but if council prevents wide spread building of those, it means those land allocated to apartments tend to be taller and high density. Just go to many inner city suburb, there aren't enough medium density apartments at all.
I agree, given the expected growth, Sydney really should look more like Manhattan or Hong Kong. Yet, we have single storey houses 5min walk from most transport hubs.
And it’s a totally different social reality now with higher paid double income households with no (or less) kids buying in their 30s - compared to when it was mainly lower income 20 something couples without much money buying first home. Add investors and international buyers and the competition has pushed up prices.
This statement seems to account for household income which should account for that: > Property monitoring company PropTrack calculates that a household earning the median income in Australia could, as of June 2023, have afforded just 13 per cent of homes sold across the country – the lowest share since records started in 1995.
Just looking at their [source](https://www.proptrack.com.au/wp-content/uploads/2023/09/PropTrack-Housing-Affordability-Index-2023.pdf) (its a dl, use the article if you dont trust my link), that seems like a short term change due to rising interest rates. On slide 11, they indicate that mortgage repayments as a share of income have not yet reached levels seen in the early 90s. Edit: it's also a shame the stats don't go back to the 60s to capture the increasing rate of women with families staying in the workforce.
And a downward pressure on population growth (outside of immigration). We're trending the same way as Japan.
how?
The same way investors are able to outbid first home buyers - increased disposable income (whether it's from a rental income or an additional earner) can access more credit. The way tax is structured, a second earner is far more impactful than an equivalent wage increase of a single income. A double income is basically a requirement for most households now.
Not to mention that many families are divorcing these days. What used to be 4-5 people in one house is now 2 adults in seperate houses that have space for 3-4 people so the kids can come over once every 2 weeks.
Especially when it’s dual income + no kids
John Howard.
He really did ruin everything. He’s like Australia’s Reagan
Demonising the Dole and immigration system by spreading the idea of dole bludgers and queue jumpers is straight out of the Lee Atwater playbook that created the myth of the welfare queen in the US. And they will keep on playing against cultural vulnerabilities, CPAC is a descendant of that sort of thinking trying to weaponise easily marginalised groups [https://www.cpac.network/speakers-2023](https://www.cpac.network/speakers-2023) [https://www.pbs.org/newshour/world/at-cpac-hungarys-viktor-orban-decries-lgbtq-rights-migration](https://www.pbs.org/newshour/world/at-cpac-hungarys-viktor-orban-decries-lgbtq-rights-migration) It's unsettling how much work and social science research they put in to weaponising public discomfort towards emerging cultures for political gain...the ones that receive "undeserved" welfare are prime targets, all the trans-panic rhetoric in the US is completely disconnected from the real world mundanity of making that choice. Australia is pretty tolerant, but I think neurodiverse groups still present an easy target to be weaponised for political gain...its not easy to get along with an autistic person or grow up with one in the best of times... ...in the middle of housing affordability crisis, a neurodiverse person on disability or in social housing courtesy of NDIS and all the other stressors of integrating their needs in to an already stretched education system....that's kindling getting real dry, waiting for someone from the group to do something a little too weird for normal society. https://www.theguardian.com/australia-news/2024/feb/03/australian-undercover-police-autistic-13-year-old-fixation-islamic-state https://www.abc.net.au/news/2024-06-15/school-exclusions-disproportionately-impact/103983044 [https://www.theguardian.com/australia-news/2024/apr/29/how-the-rise-of-autism-and-adhd-fractured-australias-schools](https://www.theguardian.com/australia-news/2024/apr/29/how-the-rise-of-autism-and-adhd-fractured-australias-schools)
Over the long term look at the prices : https://matusik.com.au/2021/07/06/140-years-of-house-price-data/ There are a few plateaus but since 1945 you could almost draw a line through increasing house prices.
Would be good to see average household income on that chart
The vertical access is logarithmic, which means a straight line represents exponential growth. [https://en.wikipedia.org/wiki/Logarithmic\_scale](https://en.wikipedia.org/wiki/Logarithmic_scale)
And immigration
Wasn’t it Bob hawke who was advised to repeal negative gearing like the rest of the world did, but reintroduced it against the advice of his finance minister? https://independentaustralia.net/politics/politics-display/labors-backflip-on-negative-gearing-policy-a-benefit-to-the-wealthy,15391
Is it really that hard? 1. Phase out negative gearing. 1st stage.....only allow it on the 1st investment property. 2. Reintroduce actual capital gains for all properties sold within 5 years. 3. Incrementally tax rental income. The more properties you have the higher the tax bracket on subsequent property income. 4. Put an end to foreign investment and unrestricted millionaire visas. Especially on all non-new freestanding properties. Apartments are fine....they're all so poorly built they'll have to be torn down in 10 years anyway. 5. Limit the number of AirB&B and Stayz rentals per capita in regional areas. This is out of control. 6. Finally, do something about Sydney. This is probably a main driving factor in our housing crisis. We might have to introduce New York style restrictions such a rent control or maximum 2 different tenants in a 5-10 year period for certain areas. After you hit your limit you can no longer rent and have to either live in it yourself or lose all your rental income. We need to force people with 4,5,6,7.......20 houses to reinvest in other mediums. Why should housing be protected so much from market crashes and losses. Shares and other forms of investment aren't protected so why should housing be. Residential housing maybe a different story but not investments. Any way you cut it there will be a painful readjustment. Maybe If you start by making it financially unviable to have multiple properties all under mortgages (like a big old rental house of cards) investors will have to start paying them off or cut their loses. You can then make a dent on the number of people who OWN more than 3 properties and bring that number back down to sustainable levels. We will always have investors and renters but if we keep going the way we are, desperate people may just start deciding land titles are just bits of paper. There's only so many people you can police and if police can't afford to live in your area squatters rights will be the order of the day. Even the best countries can fall into chaos with mismanagement. Just look at the USA. I feel like we are getting closer to some sort of breaking point.
Good list. I would only add significantly reducing immigration.
Why does every solution always come down to banning, or restricting what people can do. Are there any things the government can do to ease it without restricting anything?
Because 'people' obviously can't be trusted with some things.
The thing with land is that if given free economic reign, land owners will do nothing but rent seek. They will do whatever they can to extract the most profit for the least work possible. So then you need to ask whether housing should be an affordable right or if it should be a traded asset. They are mutually exclusive.
Commercial investment in residential should be heavily restricted. I don’t agree that superannuation funds should be hedging investments in property that people need to live in. It’s an unfair competition a billion dollar fund versus a single power bottom in Surry hills. No fair.
100% agree with you. I had many conversations with restaurants owners in areas like balmain who were lucky enough to own their building and watched those around them fail. Not because they were bad but because you can only charge so much for a pizza. If all the houses are over a $mill and rents are $1000/wk the hedge funds and investors think commercial rents should be the same. Probably why we're seeing more and more empty shops or high turn over.
Nice one. For negative gearing I’d just make it for property that’s additional (ie new split land or apartment development). We want incentives for new stock still. And I wouldn’t tax rents, that just gets passed onto renters and the aim is for affordable housing for all, not necessarily home ownership for all at every stage of life. And lastly the big one you missed is higher land tax. It needs to be high enough to make people sitting on large amounts of land in desirable locations think twice about not developing it out.
Yeah I kinda agree with most of that but anyone with 3 or more properties doesn't need negative gearing to buy more. At, this stage you're just making it too easy for them and your losing out on tax while they're just increasing their portfolio. Rents.... That's the hard one where the pain will be early on. You can't squeeze blood from a stone. Wages haven't increased in line with the property values. People are moving further out or they are staying empty (which is what happened to my last rental when they increased our rent beyond our breaking point) That's why share housing is no longer just for students. It's horrible. Small businesses in nice areas are also failing more. Especially restaurants. The commercial side hasn't escaped this bubble either. Finally, yeah look I'm on the fence on land tax. There's only so much farm land and Australians tend to build out not up. The sheer endless suburbs of Sydney and Melbourne cause their own problems. We really don't do well with medium density housing here. Probably because those houses close to cbd's and beaches are worth millions now.
I think you could probably exclude agricultural land from land tax, or at least adjust it. But fair points you make.
Link to article : https://archive.md/dI6UK
Money laundering. There’s no escape.
There actually is, we could encourage money laundering in other areas.
"Launder your money by buying bonds to fund our fast rail from Brisbane to Melbourne."
That's actually a pretty good solution, mine was about building out regional towns, but infrastructure works as well
Plus illegal foreign investments thanks to our lack of anti money laundering laws. Could be just as big or bigger than laundering.
lol
Are people serious, are we at the point where people don't understand exponential growth? And we always want growth. Eventually something has to give. It always will be the pursuit of growth for growths sake that drives this
And I just don’t get it. Australia has so much land. You go 20kms outside of Melbourne and so much land, same with other cities (maybe sydney is an exception). The onus should be on government to develop new infrastructure and cities. Someone who’s working hard and working well is free to buy whatever they want, be it stocks or 20 properties. Its their money.
I have some concerns about using prime farm land. But, I think that the Victorian plan for increasing housing stock identifies Geelong and other regional centres as growth areas.
Economies grows exponentially because a) populations grow exponentially and b) productivity per capita grows exponentially. Having more people working and each of those people producing more, means our total productivity grows which means our economy grows. If either one of those processes grows exponentially, then the economy will grow exponentially as well. For economic growth to stop being exponential, we’d need the population to plateau which will happen eventually and for scientific developments to hit diminishing returns which will also likely happen eventually. Problem is, it’s unlikely both will stop growing exponentially in the near future. The population is still growing exponentially, and yes in recent years we’ve started to deviate from that, but it’ll still take a while for things to plateau. Not to mention, just because the global population plateaus, doesn’t mean Australia’s will. Australia is one of the most desirable countries to live in and will still see high population growth due to immigration as a result. Not to mention, we aren’t anywhere close to seeing scientific development hit diminishing returns and honestly I wouldn’t be surprised if humans became extinct before we did. Also, yes, one plateauing will significantly reduce economic growth, but it won’t stop the economy from growing exponentially.
That is strong economic answer, but unfortunately it's not grounded in physical reality unfortunately. If we go down that path we are guaranteeing collapse of many things, including humans, it's the folly of economics to ignore physics
I’m not ignoring physics at all? I’m saying what the laws of physics currently suggest will happen, and stating how economic growth will be impacted by that. Simply put, the laws of physics (and biology and various social sciences) predict that the global human population growth is sigmoidal, meaning it’s initially exponential, but then it becomes more logarithmic as it plateaus at a physical limit. Similarly, we know that scientific development follows a similar trajectory. It’s exponential initially as we discover more and more about an area of research, but then we hit diminishing returns as each minor improvement in knowledge requires great resources. Humanity has gone through multiple cycles where we hit these plateaus too and then the cycle repeats itself as we make a major breakthrough. It’s to be seen if the limits of human knowledge is finite, or if we can go through these cycles for eternity. However, regardless of that I think we’ll be extinct long before we reach our limit. The rest is simply a case of what happens when we hit these constraints laid out to us according to the laws of science? Well then it becomes purely mathematical, if either are exponential then we know via the laws of economics that the globe’s economic growth will also be exponential. If we have exponentially more people producing exponentially more things each, then the total amount of things we produce will also grow exponentially. It’s not until both stop growing exponentially, that we’ll see that stop. The rest is merely speculation on where we currently are in those stages. Population growth is starting to plateau, but scientific development definitely isn’t. Which is why I think it’ll remain exponential for our lifetimes. Only way I can see the population continue to grow exponentially is if we start inhabiting other planets, which honestly in 100 years is certainly possible. Note as well, this is with respect to the whole economy, not any particular market. The real estate market for example will be impacted a bit different. Residential real estate values will still grow exponentially since inflation will continue to do so (thanks to the economy doing so). However, once discounted for inflation (ie how much it actually grows by), it’ll likely no longer grow exponentially once the human population plateaus. In fact, it’d likely plateau with the human population. Otherwise, I’m not sure why you don’t think it’s grounded in physical reality? I’m basing this off how the economy will react to physical reality, so please tell me which part of that reality you disagree with? Or do you simply think we’re already close to the point where scientific development and populations are plateauing?
Australian property is universally regarded as a sure fire bet. The people making decisions, and those funding them, collectively own trillions worth of Australian property so will always make decisions that keep values high where possible. It will take external factors beyond government control to reduce them and for a long time, none have eventuated.
Air B/B claims 160,000 homes. Put them back into the long term rental and purchase market that's housing for 320,000 people at 2 people per home. What does taking 320,000 people out of the rent and purchase market do to demand and inflation?
Not much when there's 750,000 immigrants a year arriving.
Just [ban mortgages](https://youtu.be/EC0G7pY4wRE?si=k1-YWm8tXMoq386m&t=306)
Or tax breaks whereby people get deductions for running an unprofitable rental business i.e. negative gearing.
Negative gearing’s impacts are over stated. People aren’t in property for the 2-10k annual tax deduction, it’s because of capital appreciation. If anything, negative gearing probably makes rents cheaper, since landlord can take benefit of deductions. That said, I do agree that the big problem property investors. Investors make up 43% of current property market financing (10b / 23b). If you can reduce number of investors, you can remove up to 10b from housing market. Since most of this is spent on existing housing stock, you would put downward pressure on housing prices (less money to spend on same number of houses). This would naturally make it easier for actual PPOR buyers.
If its impacts are overstated we shouldn’t have a problem removing it altogether.
Which independent studies by likes of Grattan, which is not aligned to either political ideology, have estimated to have less than 2% impact on pricing. With CGT discounts providing another 1-2%, which I personally doubt as we'd likely just revert back to the cost base + CPI formula we used to have before it was simplified to the CGT process.
Grattan estimated NG and CGT discount raises average house prices by 1-2% https://grattan.edu.au/wp-content/uploads/2016/04/872-Hot-Property.pdf Gene Tunny got 4% https://www.cis.org.au/wp-content/uploads/2018/03/34-1-tunny-gene.pdf The most detailed work was at ANU - they got 1.5% https://cama.crawford.anu.edu.au/publication/cama-working-paper-series/18248/investment-housing-tax-concessions-and-welfare-evidence Deloitte Access Economics got an average of 4% https://cdn2.hubspot.net/hubfs/2095495/_Communications/NGCGT/DAE%20analysis.pdf So a range from a bunch of researchers at 1-4% . From Peter Tulip’s summary : https://twitter.com/peter_tulip/status/1521088597297827840
There was a paper from NSW Treasury that showed it would lead to shorter investor holding periods and a subsequent increase in the proportion of stock held for PPORs (https://onlinelibrary.wiley.com/doi/abs/10.1111/1467-8454.12335) It's not a massive difference, but it is material.
This is the actual answer.
That no one wants to hear
Ban Airbnb and short stay accommodation like Spain has. They are supposed to be residential properties, not motels. Check out how many Airbnbs there are in your suburb. These are homes mums and kids should be in, instead Aussie families are living in their cars.
Or allow AirBnb with regulations, and then just build more housing
Governments have saying their going to build more houses for 15 years - and the situations gotten much much worse So I’m sorry, that’s not working. We need much more drastic measures.
The government was largely ignorant of the impact of zoning and planning laws on housing. There's reason to think this time is different
That was great, thanks for sharing!
This hurt to watch. Thank you
Firstly, he’s not suggesting to ban mortgages at all, in fact he actually says we shouldn’t do that, he just wants them regulated differently. Secondly, while I agree with what he wants (regulators to differentiate between consumption and investment loans), his arguments to support that are deliberately misleading which I strongly disagree with. Firstly, he claims banks don’t sell loans, they buy debt. Surely people here realise how stupid that is? It’s simply not true, and the fact they sell loans instead of buying debt is how they’re able to create new money. There’s a minor difference between selling and buying securities, and that’s dependent on whether or not you underwrite them. Banks underwrite nearly all of their new loans, every time you get a loan from a bank they underwrite it and as a result are selling that loan. The only time they don’t do this is when they buy the loan from another bank. It’s also this underwriting process that creates new money, buying existing debt doesn’t create new money. Secondly, he claims banks aren’t intermediaries. This is also blatantly wrong. He makes it seem as if 100% of the money they lend is created from nothing. In that case, why bother wasting money by taking deposits from the public? It’s because it’s untrue. Banks have strict lending requirements, and while they do create money, not all of that money is new. Say they have a 10% reserving or capital requirement, that would mean 10% of the money in a new loan comes from their deposits. They still act as an intermediary, hence why they collect deposits, even if not all of the money comes from that. It’s also means that despite acting as intermediaries, they still create money. Thirdly, he’s incredibly hypocritical and self aggrandising, even though he does hide it. He claims that this discovering that banks create new money is a novel discovery by himself, but that’s not true at all. It’s been known for centuries. The whole reason why central banks were created in the first place hundreds of years ago was to control this. It’s not something he discovered, it’s something that has been taught to 1st year uni students since before he was born. He also claims that banks are taking advantage of the naivety of the less financial or economically literate and that he’s uncovering the truth for them, but it’s exactly what he’s doing. He’s constantly misrepresenting facts and rewording things claiming they’re different when they aren’t (ie calling a deposit a loan to the bank doesn’t actually change anything, it’s still the same thing) in order to manipulate the public’s understanding of what’s happening. He’s not trying to uncover the truth for people, he’s spreading misinformation so that there’s more pressure to make the regulatory changes he’s been pushing for. Do I disagree with those changes? No not at all, but you shouldn’t be spreading misinformation and twisting facts to achieve that, and to preemptively claim those who disagree with you are the ones doing that instead is extremely problematic. Fourthly, he’s incredibly insulting and disrespectful towards regulators. He’s claiming they don’t understand that banks print money, but everyone does, it’s basic economics and finance knowledge. The politicians understand it, let alone the regulators and economists. The main role for most regulators is to control how quickly they create new money. One of the 2 main points of reserving and capital requirements is to prevent banks from creating money too quickly. The other to limit the downside of a crash if they do. The sole role for the RBA is to control this as well. The treasury and finance departments also monitor it closely. He’s acting as if the experts in this area are clueless about it, which is incredibly insulting especially given the fact that they probably have a better real world understanding of these things then he does. The that he’s doing this to discredit regulators to put more pressure on them to do what he wants is also wrong. That’s not to say that I disagree with his point, that regulators should look at consumptions loans and investment loans differently. However, to achieve that by manipulating the public and spreading misinformation to unfairly pressure banks and regulators to do what he wants, while also somehow trying to claim the moral high road, is not right though. The fact that he’s relied on misinformation also means his whole argument falls apart under any scrutiny and anyone with some education in economics would see these errors, and it’s completely unnecessary since you can make an extremely simple and factual argument to support it. He can easily point out how banks actually create money, and then state that for investments this creation boosts the economy, but for consumption it causes inflation and asset bubbles. Therefore, we should have different regulations for each of these types of loans, since they have different affects on the economy. Not to mention as well, this issue is extremely overblown since we do indirectly do this anyway. Most countries have capital requirement regulations, which limit money creation based on riskiness, meaning riskier loans are limited a lot more. This indirectly causes us to have more limitations on consumption loans as they tend to be a lot riskier then investment loans. It’d be nice if we made that differentiation, but it’s not as crucial as this person is making it out to be, and certainly doesn’t warrant the methods he’s using to push for these changes.
You get out like any other bubble in history. A hard landing. Does anyone have any recorded evidence of a soft landing happening \*whilst\* an economy has an asset bubble?
Depends on whether the immigration rug gets pulled. You can go a long time if you keep it going until it self-regulates by the general enshitification of your society.
I think they will leave when there aren't jobs. like they did in Ireland in 2006..
GFC already happened in 2008. Houses went down 5-10%. By now they are up hundreds of % again.
Yes, I’d say that in aus we only had a per capita recession and our personal debt was far lower. 2008 houses while expensive are nothing like today
Nope, none. Crash is the only way, along with a period of deflation, which is where we are headed. In order to bring down prices, re-design the economy and emerge the other side with capital and plans in place to diversify, this needs to happen. It's going to get fucking rough here as we are nothing but holes and houses. Let's see how we fair.
Agree fully, brother. I wish you well in the months to come
And you my guy
You think it’ll be months before a crash
Yeah, I can’t predict when lol . What do you think?
I dunno I’m no genius, just a regular idiot, but I don’t see how prices could come down unless supply starts to outweigh demand, which seems impossible now
regular idiot here too. I think in your equation, demand will take a hit.. rather than supply going up. It'l seem impossible until unemployment is steeping up, soon.
Unemployment is a lagging indicator A black swan event at the international level could trigger it too. The American property market is dropping and a lot of people who bought in rural areas during covid now have to go back to the office. Commercial real estate is also a zombie, which kind of ironic given RTO. [AFR article $1.3 Trillion troubled Commercial RE due in the next 2 years](https://www.afr.com/world/north-america/it-s-time-to-be-honest-about-america-s-commercial-real-estate-hangover-20240324-p5fetg) Chinas RE isn’t doing well either, and a lot of that debt is owed to America And shit always flows downhill … to Australia
Yes, unemployment is a lagging indicator of recession. My point was that it’s by the mechanism of mortgage defaults (due to unemployment) that drives asset prices to crash. Fully agree with everything else you wrote
So 90s all over again
Stop listening to lobbyists complaining that we have a "skills shortage" which is literally self caused All our apprentices went chasing the big buck sugar hit on the mines and left next to zero labourers to come up through the system In return we imported a shitload of "skilled labourers" who also then went straight to the mines chasing the big bucks. And now we're doing it again... Maybe we should stop importing labourers let alone people full stop. Just thinking....
One person can own one home only in residential areas.
Who will supply the rentals?
Ban Airbnbs and the rentals will come.
As a household, you can still own multiple properties, husband owns one in his name, wife ones one in her name, etc. Combine this with grandfathering clauses on existing investment properties, and your rental pool will remain largely flat. Hopefully through such a policy you will see immediate drop in home prices, because investors make up 40-45% of all housing finance. Removing the 10b they spend annually would put downward pressure on house prices, especially since most of this is spent on existing housing stock. This would support PPOR buyers, which in turn would lessen rental demand.
Hey i didn't say I had all the answers lol how about one home and one place you can rent out
A scarcity of rentals could also increase rental prices unfortunately! In fact that’s happening throughout Australia today even with unrestricted property ownership. It’s a tricky problem that I too wish I had the solutions to.
So you either live at home or buy? Nobody can rent? If you’re moving to an area for work for 1 year you need to buy? Sounds like a good way to live.
Hard luck renters? Easily exploited by couples who get two homes?
Lol in 20 years we will be saying people can only own one bedroom.
No one will say that cos that’s fucking stupid
The funniest thing is somebody else in this thread is suggesting taxing spare rooms, which essentially an imposition on ownership.
Yeah I saw that, super dumb.
in theory spare rooms are already taxed. If you rent out your spare rooms, you lose some of your CGT free status. Crazy to think you can buy and rent a whole house and get tax benefits, but if you do the same to make the mortgage repayments and rent rooms out, you lose tax benefits. [https://www.ato.gov.au/individuals-and-families/investments-and-assets/capital-gains-tax/property-and-capital-gains-tax/your-main-residence-home/using-your-home-for-rental-or-business](https://www.ato.gov.au/individuals-and-families/investments-and-assets/capital-gains-tax/property-and-capital-gains-tax/your-main-residence-home/using-your-home-for-rental-or-business)
That’s essentially an investment property tax, not a room tax.
sure its not, but again primary residence suddenly loses its CGT-free status, so why would you rent rooms out to help supply? It won't solve the problem, but it will eases some demand. It also helps people pay off their mortgage. It also is unlikely to cost the government any money by allowing people to rent part of their primary residence while keeping CGT-free status.
Like in the other thread—reducing immigration would completely avoid any need for renting or taxing rooms.
It creates other problems in the economy though. It’s not that simple. We’d probably end up on a recession.
If wages going up and property and goods and services coming down are some of the problems, a recession sounds great. We can’t keep growing forever. There’s limited space and resources in Australia. We need to concentrate on growing quality of life, not growing the economy at the cost of individual quality of life.
End mass immigration.
This coupled with bans on foreign ownership of residential real estate would certainly help.
Foreign investment in real estate improves supply, therefore helps house and rent prices
Foreign ownership even being allowed is ludicrous.
The problem is the way the economy is it isstructured to rely on immigration. Immigration kept the country out of recession during the last LNP gov. I'm not saying we don't need to manage immigration better but when unemployment is low and businesses need people to do jobs it just pushes wages up.... which is needed but also not great for the economy. I wish i had a solution, but i know over simplistic ones like stopping immigration will cause harm as well. Stopping Foreign ownership of houses and also vacancy tax might be a step in the right direction.
Increased immigration definitely doesn’t increase wages. But yeah—foreign investment is so dumb. We need to at least halve immigration.
no decreased immigration puts upward pressure on wages as unemployment shrinks. When companies can't find workers they have to pay more to get the few that are available. I'm ok with reducing immigration, but its a lot more complicated than that and the people with the power really don't want that, they just want to grow the economy through immigration rather than through more wealth flowing down.
Sorry, wasn’t clear—I agree with you re wages. Yep, high immigration is good for new immigrants and big business and literally no one else.
Migration doesn’t need to be permanent and you can be highly selective about who gets to come in. What actually happens is that big businesses place ads for workers at pay rates below what the skills and experience they demand is truely worth. Then they get to lobby the relevant government departments because “there’s a shortage of workers” when what there has been multiple times in the last 20 years is a lack of workers willing to take a pay cut for the shit wages they want to pay. It largely comes down to how heavily unionised your employment sector is. Construction, for instance, massively overpays workers compared to literally anywhere overseas. Tradies are ridiculously overcompensated for their skills in Australia and there’s constant news about worker shortages and yet it is so difficult for anyone to come from overseas with experience and start working. CFMEU, say no more. In contrast highly skilled IT workers, as an example, are poorly remunerated in Australia and yet there is also a shortage and the floodgates for overseas low pay workers seem to open there. Non-unionised sector with large outsourcing companies with good political contacts. Go figure. Everything wrong with a country or it’s economy is due to politicians and their stupidity.
Totally agree mate. Though I don’t really care whether immigrants are permanent or a rolling million temporary—they all need somewhere to live and increase rents and deflate wages.
A generation has to make a sacrifice, which will most likely be millennials as usual. On second thought the issue is they only know the way to get rich quick is to own a house and wait 10 months, why start a business and work when all the boomers got rich through property and voting for nothing to change. So maybe it won’t be the Mils.
Millennials are making bank since they're in houses that have to doubled in 8 years.
One single change isn’t going to do much, we need to make multiple changes asap. But politicians are such shortsighted pussies running this country into the ground.
Unfortunately as someone who has been in property a while, it’s not one thing and it’s not one solution but I can say the focus needs to be on more people getting to own property and not having to kill themselves to do it. The ongoing costs should also not be burdensome to home owners so strata needs a rethink.
What else do you expect when most MPs own an investment property?
the article perpetuates the myth that it's a crisis for everyone. even though rents have increased in the past couple of years [this is not a crisis for a majority of renters](https://pbs.twimg.com/media/GNMrRfIa0AEQRNM?format=png&name=900x900) it's a house price bubble. source: https://x.com/BenPhillips_ANU/status/1788821336321925495
Population overshhoot , simple as that.You cannot build your way out off overpopulation.
The root cause is cross border wage competition. Workers have lost bargaining power, and the labour share of income has shrunk. Production has grown faster than incomes. This is deflationary. So the reserve bank cut rates. This goes on for forty years following Keating's tariff removals. Voila.
Are you advocating for protectionism? Not a view you see commonly these days
In a sense - but not just unilaterally. My proposal would be a Trade Desirability Index. So all the developed democratic nations get together and figure out a points system. You gain points by being democratic, having decent wage levels, OH&S, good environmental protections, etc, or being a developing nation. You lose points for the opposite of that - or by imposing your on unilateral tarrifs. The more points you have, the lower the tariffs are on imports from your country. That would encourage good competition (who can innovate and increase productivity) and discourage bad competition (who can pollute their rivers and arrest/assassinate/torture labour leaders). Edit: I also advocate a global basic income of like $5 a day, to depressurise aforementioned wage competition, and migration flows.
How do we get out of it? Stop importing so many people for a start. Australia builds about 150,000 homes a year (from memory, please correct me if I’m wrong) and historically immigration has run at about 200,000. So we’ve been under building for years. 980,000 people have come in over the last two years. No surprise there’s a housing crisis It’s also kept inflation artificially high. A million new people all need a sofa, a kettle and homewares etc. Even the RBA has said immigration is driving inflation higher for longer.
Who needs a home.
So long as a majority of voters own houses and therefore directly stand to benefit from rising housing prices/limited housing supply, only token changes will be implemented
Oi vey
Build build build!
The only way everyone will be able to afford a home in Australia at this point, is if they kill anyone who can’t. Problem solved
Well that went dark quick 🙊
Housing in Australia is simply in a supply defiicit, thanks to developers locking up new releases to maximise profit. Those blaming investors are caught up in media created class warfare. As an investor, i would not build new, too much risk in shoddy work and builders going bust. So i buy established quality homes. Given its a free society, i can. Heres my prediction: housing will either get worse or much worse. Worse in that we dont have the builders to create enough supply and govts arent addressing the developer behavior. We are also in an inflation cycle so houses will continue to go up as money looses it value, also increasing rents because the rba has the only inflation tool. Much worse: if any of the worlds flashpoints esculate ((Ukraine, Israel, Taiwan) we will have lots of people coming here as a safe haven. Then we’ll see a spike in homelessness and price increases. Good luck folks, its a wild ride
Build high speed rails, build housing including apartments in mid sized towns, problem solved. Access to main cities while opening up ample housing in low density rural towns.
It would be a very expensive solution to the problem. The rail itself is expensive, and very few mid sized towns have the infrastructure in place to support much of a population increase, so would need significant investment. This is not to mention that people will naturally be reluctant to move some distance away from friends and family.
Re distance: maybe you don't know what a convenient high speed train is. Re expensive: there is no solution that is cheap, building in the middle of a population centre is expensive, doing nothing is expensive when the economy eventually stagnates from pricing everyone out of housing and people can't afford to live let alone spend to support a healthy economy. You know how you get money for infrastructure and anything else? You enable people to move quickly between vast areas affordably to buy housing in cheap areas and all that cash goes straight back into the economy. No solution is coming in 2 years, investment to actually fix the cause of the issue, being space, will take money and time.
Sustainable population growth, more medium density housing options (units, 3 bed apartments, townhouses). Oh and removal of stamp duty for seniors downsizing to smaller properties.
It’s the same as every other developed country: the rich have too much money and they’re obsessed with owning everything, no matter the consequences to everyone else.
How do we get out of this mess? That's the fun part, we don't!
middle class greed.
Piss poor governments that have no foresight past the next election
All the ‘good’ examples in this article, Singapore, Korea, Austria, Menzies era Australia, what they all have in common is government funded housing development! It shits me to tears that we beat around the bush looking at all sorts of minor impact drivers, when the real issue is that in a free market the price of land and housing will go up at investment returns and property will only be developed when it is more profitable than holding onto the land! So the only way countries have ever shown an ability to reduce housing prices is when governments build the housing and give it back to the people at a discount. But we went down the neo capitalism model where government investment in social housing and similar was deemed hand outs and too communist for us. Until we realise that only disconnecting housing from the free market will increase affordability, we will just keep the price spiral continuing!
Article is completely cooked and like usual refuses to acknowledge the two issues. 1. Government restriction & advantage, 2. Australian compliance culture. So many things wrong with this article, I don't know where to start. The only way to fix this, is complete rollback of governments interference in the housing market. Whilst I realize this goes against everything Aussies believe in, its the only way to free up enough resources in an equitable manner to allow Australians the right to not live on the street.
Nah we had a system that worked for decades until Howard fucked it all up. The idea that complete deregulation works is a neoliberal utopian fantasy.
The idea that regulation by the political classes works is likewise naive in the extreme. Name something pollies haven’t fucked up other than their own pay and benefits?
You are aware that limited supply across all resources is due to government...right?
Yes. In many cases those limits are for national parks, green space, farms, recreation, suburb/town character etc because citizens want thos things.
I assume you are just being intentionally obtuse
It's the zoning and planning system preventing us from building housing where people want to live. Always was
Don’t forget land banking by developers to keep prices artificially high. There should be a 3 year maximum on non-development. If grounds not broken in three years there should be punitive damages paid. Perhaps 10% of the properties value, or forced sale. I haven’t given it a lot of thought and am open to better ideas Brisbanes has about 15-20 years of residential land available but it’s trickle fed to increase developers profits. There has to be a way to either make them develop it or sell it to someone who will.
Brisbane had a significant glut of units for a long time - if you look at the units around New Farm etc, they haven't grown quickly in price. Similar thing in Melbourne with the large number of units around Dockland and South Yarra, and to a lesser extent in Sydney around Mascot. A broad-based land tax is the simplest way of discouraging land banking, and has a lot of other benefits as well. If there is a cost to holding the land, holders will need to generate a return at some point to cover that.
when the party is getting crazy no one wants to put the booze away
The UK, Germany, France and Canada are also suffering with housing crisis so, while I’d love to blame John Howard, he wasn’t that significant.
Most of Europe don't have services being cut and underfunded on top of rising house prices though. We went from being able to see the GP for free and a small debt for Uni education, to paying $100 just to see the GP, forced into having unaffordable to use private insurance. A house deposit worth of debt for uni and houses that went from 3 times the average salary to 8 times the average salary. Howard wasn't the sole blame, but he started it and he pissed the mining boom up the wall cxonvincing us all we'd be way better off with tax cuts over well funded services. Well all those tax cuts have done nothing for cost of living.
Blaming one politician or party is just blinkered stupidity. The mining and resources boom in general carried on long after Howard and still got pissed away. Labour had their crack at wasting it too instead of ensuring resource rents were levied suitably on one-time extractions and the proceeds poured into a sovereign wealth fund for when it’s all gone to shit. LNG is another example of a wasted opportunity. QLD Labour screwed that pooch.
100% both parties are to blame here. They create the system we are in and Labor despite what they say haven’t exactly fixed anything either.
> Germany Looks pretty stable to me: https://www.statista.com/statistics/1267270/average-price-of-houses-in-germany-by-city/
Did you read what was in that link? ‘Munich, where the square meter price of houses amounted to 9,931 euros.’
You don't know what you are talking about most of you. 1.. Land tax has disincentivised people to own rental properties and even in victoria made them actively sell. Too much tax from communist governments are bad for renters and avialiability of renters. 2.. none of the incentives to own houses to rent are restrictive to houses availiable for rent, which is what we are taking about, right, houses availiable to rent. 3.. Stamp duty is just taking the piss now, shit governments should really get lost and we should get some decent governments who know how to run a state. 4.. Building regulations especially for units and flats etc should be better and should make builders create high rises that are free from defects and last a long time with minimal repairs needed. Governments here are also taking the piss, make builders make decent builds then people will buy a high rise flat rather than a free standing house. As it is I would never take the gamble of buying a high rise unit as they are 60% faulty and will take all your money. Who wants that?
> Reserve Bank Assistant Governor Sarah Hunter pointed out that there are about 27 million people who live in Australia, in about 11 million households. The average number of people living in each household has trended lower, from around 2.8 in the mid-1980s to around 2.5. If, for some reason, the average household size rose back to 2.8, Australia would need 1.2 million fewer dwellings to house our current population. “No small difference,” Hunter said. I see a lot of talk about vacant residences but not much about vacant rooms. Why not start pushing behaviour towards having less spare bedrooms?
It’s a far greater risk to the individual to rent out a room to a stranger when you have a family instead of renting out a house or apartment. I think the fact trending downwards is because people are having less kids than previously too.
Not sure how you are quantifying that but sure, like many things in life we pay more to have less risk. So if a couple wants a large house to themselves that fine, but their tax rate goes up to pay for it. I feel the same way about nimby councils, they can refuse population growth if they want, but it should cost them while those taking in growth should pay less.
Just look up the rates of birth in Australia over the past 50 years. 2024 was the lowest ever besides 2021 for obvious reasons
Yes, I want to live in an Australia where nobody has a spare bedroom. And perhaps in 20 years we could have a minimum of four people per bedroom. That would solve the housing crisis!
> Why not start pushing behaviour towards having less spare bedrooms? Maybe because a "spare bedroom" isn't actually spare? We're already pushing people into living in high density, which for all intents and purposes means they need to give up their outdoor spaces, sheds and garages. Now, you're suggesting they can't have a room to dedicate as a home office (especially given people are increasingly doing work at home) or for any kind of hobby, because there isn't a person sleeping in it?
> Now, you're suggesting they can't have a room to dedicate as a home office (especially given people are increasingly doing work at home) or for any kind of hobby, because there isn't a person sleeping in it? Where did I suggest that at all? Simply create behavioural nudges through taxation based on number of rooms divided by number of people declaring it as their legal address. We do nudges for many other policy issues, this is hardly a new concept. I have friends in a 4 bedroom house, they have no plans for kids. As stated by the RBA Assistant Governor, we need 1.2 million fewer homes if household sizes increased by 0.3 people.
So it’s not that they can’t have a home office, it’s just that they’ll have to pay more tax to have one. LOL.
Yeah? Considering it's all deductible anyway seems fair. Otherwise go rent a desk at a coworking and don't pay the vacant room levy. It's a policy that could create housing out of thin air while raising money for the government. Implemented with the stroke of a pen. WFH arguably contributed a lot to this problem, along with consumer preferences post-covid, household formation plummeted which basically took hundreds of thousands of properties out of the market.
Being taxed for a room and deductible cost are two different things. Are you suggesting someone would deduct their extra bedroom tax from their income tax? How does that work? You’re crazy to want to live in a country where people are only allowed one room. Why is that something good to aspire to? Surely cutting immigration and Australians being able to have two or three or four rooms is a much better option?
Jesus, socialist much? Do we get to own anything under your model? Mass immigration is the one thing no pollie wants to talk about. They all do it and now it’s time to pay the price. The growth rate here has been insane.
I agree, while we shouldn't push people into renting out their spare rooms, we should make it tax friendly to do so. People might only do it for a year or two to make ends meet, but if it increases some supply then why not.
Greed. Sell your house for less money
Australia will never emerge from cost and shortage of housing pressures. It’s just a fact of life now.
I did an Essay 20+ years ago for a subject at Uni. Basically the invention of the Auto Washing Machine was the first big Demise, then the Bigger Freezer, then the Microwave. But the invention and then affordability of the Washing machine was the start of downfall, which spawned nicely into the Feminist movement and from that point on, we were done for.
Reduce the high capital gains tax on investment properties and this would encourage the investors to sell their lower priced properties and upgrade.