Housing affordability. It’s really a bit of a bummer, eh?
Like many Gen-Yers, my partner and I have been looking to buy our first place for a long while now and we just keep running into roadblocks. They come in the form of big, bulging dollar signs.
Because, as we all know, house prices have more than doubled over the last 20 years.
And in the two cities where 40 per cent of the Australian population lives, Sydney and Melbourne, prices have risen by 70 per cent and 40 per cent respectively since 2012.
Meanwhile, salary rises are barely keeping pace with inflation, putting house prices in some parts of the country at eight times higher than our incomes.
All in all, it’s not a pretty combination.
And yet, here we are: Gifted a Federal Budget with, at best, a whispering mention of the housing affordability crisis.
So what, you ask, was this whisper (contained amongst the many hundreds of pages)?
A few hundred Commonwealth-owned homes in Brisbane will be freed, a new agreement has been made with the Northern Territory for remote housing, and $4.8 million will be funnelled to the Australian Bureau of Statistics over four years to better estimate the amount of affordable housing.
Wow. Wonderful. Thanks.
Like I said: barely a whisper.
It’s been a dramatic change in tune from last year when Treasurer Scott Morrison recognised in his budget speech that the housing crisis was an “important issue” for many, many Australians.
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Top Comments
I would much rather our federal budget made sensible and shock horror unpopular decisions that actually benefited our nation as a whole.. Spending money on those less privileged, creating programs to stimulate the economy, revamping the entire tax system.. making hard choices that don't pander to a 24/7 news cycle and a twitter sound bite... remember when budgets weren't about "what you got" but what they were going to do for our country, and how they we going to help people here that weren't as lucky as some.. Maybe we could do that..
Stop being so sensible, it might make the politicians and special interest groups' heads explode
I think if you want to make housing more affordable you should look to State Governments Stamp Duty and other charges, the green tape around releasing more land, charges and zoning policies for Local Councils that further restrict supply. Besides selling Commonwealth land, there’s little a Federal Government can directly do on the supply side.
On the demand side, the two obvious things a Federal Government can do is to cut immigration and clamp down on foreign buyers buying residential property. That’s fine, all the polls show a majority of us think immigration rates are currently too high.
Property is like any other market, price is determined by the economic laws of supply and demand. Just providing more support for home buyers without addressing the supply side merely drives up prices further.
We are very rarely of the same opinion Les, but I wholeheartedly agree with cutting down on immigration and foreign ownership of residential property. My SIL’s street has a number of large family homes that are empty but maintained. They are owned by people from a country that likes red and dragons. It’s a problem. They park their money in Australian property, not really caring about the cost of the property, because it is safe and they will get a ROI. Meanwhile, Australians struggle to secure affordable housing.
I am also increasingly concerned that the polls show Australians overwhelmingly do not want a “Big Australia”, but the politicians and big end of town do, for obvious reasons. We need to have a national debate and a well-funded population planning body as all these newcomers may boost the economy initially but they also cost us in terms of infrastructure and congestion. Dick Smith’s Fair Go organisation is attempting to get this issue into the public domain.
Negative gearing significantly distorts forces in this market and artificially inflates prices. Trouble is, too many voters make use of NG, and if the pin were just pulled, many of them would end up in financial distress. Political poison, but a big factor in fixing price inflation.
There are other (sorta) extra-market forces that push prices up. State governments, that used to rely on revenue from the mining industry, have become more reliant on revenues from property developers as mining has fallen away a little. This means that state governments are making it as easy as possible for development to go ahead. Developers will pay more, per house, to get a block of houses than private purchasers will to buy a home, pushing price tags, in general, up.
In my opinion, these are far more significant upward pressures on demand than immigrants, many of whom are renting.
NG is a bit of a two edged sword. Keating removed it briefly as Treasuer and rents went through the roof, causing a quick policy retreat. No reason to suspect it wouldn’t happen again making it a choice to help home buyers but with the pain inflicted on renters.
I’m not at all against immigration. If I have to go to Emergency I’m aware I’m just as likely to be treated by a foreigner as I am to have one holding up the queue in front of me, but I think it’s just too many at the moment looking at roads, public transport and yes, house prices. I also question if we really need to be importing hairdressers and people who don’t attempt to learn English, hence limiting their job worthiness. Seems to me we are doing this for the benefit of big business, the construction industry and in some cases to import voters for the Left. Maybe if our education system was producing more young people capable of productive work things would be better. Look at Germany, lowest youth unemployment in the world because business and schools work together so by graduation the student has an employer and the specific skills to start working with them.
Germany also has a huge migrant intake. I think biggest in Europe, without fact checking.
Skilled immigrants are undoubtedly best, but not when working under a 457 visa (Thanks, Gina and your LNP connections. You and Barnaby should just pash, already) ), because they place downward pressure on wages - one, of quite a few, of our economy's structural issues holding pay down and reducing housing affordability.
I think that there are very few immigrants willfully refusing to learn English, rather, I think that factors like child-rearing and age limit some immigrant's exposure to the language.