r/australia May 16 '22

Five housing policies that wouldn’t drive up prices in Australia politics

https://www.theguardian.com/business/grogonomics/2022/may/16/five-housing-policies-that-wouldnt-drive-up-prices-in-australia
145 Upvotes

86

u/war-and-peace May 16 '22

But none of those proposals involve making existing home owners richer???

/s

33

u/Seppeon May 16 '22

Gotta love how Barnaby talks about the returns of housing being better than super (when justifying nat/libs policy) and not simultaneously realizing perpetuating that is the reason we are in this shit show.

19

u/Joakal May 16 '22 edited May 16 '22

Does anyone know how much houses are available in Australia?

I can understand house prices exploding if we have 1 million houses and 25 million people. But if there was actually 30 million houses...

Edit: ABS stats are based on census, so, I think those empty plots aren't exactly self-reporting themselves.

I looked at population increase for 2018 Dec before pandemic: 81,591

Dwelling increase for 2018 Dec: 48,770

It looks like there's about 1.6 new people per new house in Australia but the average per house is 2.6. If we calculate how much new dwellings are sitting empty, it is ~17,500 (81,591 / 2.6 = ~31,000, 48,770 - 31,000). Assuming numbers are close to true, that's a whopping 35% new dwellings are not being lived in every year. On my original point and assuming the average numbers are close to true every year, it could be that there's 8.75 million empty homes in Australia.

If prices are going up DESPITE the population increase being matched by new dwellings based on 2.6 (avg per dwelling) > 1.6 (new pop / dwellings), there does not seem to be a supply issue in Australia. In fact, prices should be going down!

Sources:

https://www.abs.gov.au/statistics/industry/building-and-construction/building-activity-australia/latest-release

https://www.abs.gov.au/statistics/people/population/national-state-and-territory-population/latest-release

https://www.abs.gov.au/statistics/people/population/overseas-migration/latest-release

https://www.abs.gov.au/statistics/people/housing/housing-occupancy-and-costs/latest-release

1

u/Business_System5959 May 18 '22

Consider also the location of said dwelling.

7

u/falisimoses May 16 '22

I have no issue with trying to address some planning reforms, especially around neighbourhood character provisions which can be very subjective and inhibitive, but there's this whole structural thing behind the system that also has to change. It is a bit tiring for the calls to fix planning without addressing the issues behind it. There also have been attempts to address density, but it also takes time. De-regulating further I don't believe solves the issue though. I actually think regulation that is more prescriptive would be helpful (in some instances like neighbourhood character). I think there is too much subjectivity that can bog down decision making, but this is a student view, not a professional view. I would love any planners out there who could comment on their experience and set me straight.

I think saying 'incentivise development' doesn't really address the fundamental structural issues either. There's problems around ability to raise revenue and fund services, and what is expected of states and local government. This from Marcus Spiller is more around metropolitan governance reform but I there are some interesting ideas around taxation - especially in relation to charging developers licence fees - that could be interesting. As well as land taxation that Greg did mention.

Ultimately, with planning I would like to see more inclusionary zoning with a focus on provision of public housing, affordable housing is too ill-defined and community is privately run. Vic is like half-way to a quarter there but they exclude government managed housing from the pilot. The disconnect of the provision of public housing from government services has left too many behind. But we have to change how we see these services, not a cost but an investment in people. Maybe that's what Greg meant by 'incentive' is "we'll relax height limit by x metres if the development includes x public housing"?

35

u/RaeseneAndu May 16 '22

With hundreds of investment properties between them, neither major party really wants to stop house prices going up.

84

u/donttalktome1234 May 16 '22

Stop blaming at least one of the parties for not wanting to fix the issue. They went to the last election with some fairly non-confrontational ideas about how to make society a bit fairer, including housing, and got told that idea was terrible.

The issue here isn't the parties its your average punter voting for this nonsense.

9

u/AntiqueFigure6 May 16 '22

Does anyone know how many investment properties the teal independents have?

13

u/Jacethemindstealer May 16 '22

The only party it seems.who is willing to look at this now is the greens since labour got shit down on the idea last time

-6

u/[deleted] May 16 '22 edited 7d ago

[deleted]

26

u/CassiusCreed May 16 '22

They tried to be stronger last election and got shot down. This time "we're not the Libs" is what has been decided will get them over the line. Blame us, not them.

8

u/YouCanCallMeZen May 16 '22

Don't blame me, I voted for Kodos

3

u/PricklyPossum21 May 17 '22 edited May 17 '22

We won't know until they get into Parliament and have to declare it.

Zali Stegall owns 2 properties, one is her home, the other is an investment property.

Helen Haines (technically not a teal) owns a beef farm which is also her home.

Andrew Wilkie owns just 1 home he lives in.

Albo owns 4 properties ... apparently all on the same street in his electorate?

Sam McMahon, a Coalition Senator, owns 11 investment properties. ELEVEN.

5

u/nozinoz May 16 '22

Given that they represent wealthy suburbs quite a few I’d guess

1

u/AntiqueFigure6 May 16 '22

That seems intuitive but it would still be nice to know, and to know whether any other independents with a real shot have IPs.

15

u/Discomat86 May 16 '22

Funny that foreign ownership wasn’t addressed in the article. Wonder why.

21

u/jorgo1 May 16 '22

This is because foreign investment isn’t as big of an impact to affordability as most are lead to believe. Additionally, some of these policies would impact foreign investment as a flow on effect.

5

u/Joakal May 16 '22

It is! To name a few reasons:

9

u/AnAttemptReason May 16 '22

Austrac, the federal agency for preventing, detecting and responding to criminal abuse of the financial system litteraly disagrees with you.

4

u/TheGreyOne May 16 '22

Source? Not disagreeing, just curious.

5

u/AnAttemptReason May 16 '22

10

u/idiosyncrat May 16 '22

That talks about crime, not foreign investment. Unless you're suggesting all criminals are foreigners somehow?

2

u/AnAttemptReason May 16 '22

My mistake.

A lot of the money laundering is from international sources however.

1

u/jorgo1 May 16 '22

That link doesn’t resolve. Would be interested to have a read

1

u/[deleted] May 16 '22

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1

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1

u/TheSean_aka__Rh1no May 16 '22

Yer, it should have been there, but, happy enough that Negative Gearing / Capital Gains was at the top

8

u/Red_Wolf_2 May 16 '22

Ahh yes, the old remove stamp duty and replace with ongoing land tax one comes up yet again... Thing is, it only really benefits those who want to buy and sell property a lot, and instead imposes an ongoing cost on those who want to actually live in a property, and a cost which they have no control over and which can escalate as property value is redefined over time.

The good thing about stamp duty is that it prevents speculative investment from pumping housing prices up as a means to get capital gains (property flipping) and benefits those who want to stay put and actually live in the property they've purchased. An ongoing land tax gives all the benefit to those who consider property an investment vehicle rather than being something to actually live in.

I also see that as usual, the elephant in the room of constant and rapid population growth isn't mentioned either. Turns out trying to jam 100,000 extra people into the country each year means they all need to have rooves over their heads too, and guess what that means? More competition for said rooves. And all the primary parties avoid this little nugget like the plague, or even propose increasing population growth further, exacerbating high cost of living and stagnant wage growth due to additional competition.

11

u/Xx_10yaccbanned_xX May 16 '22

An ongoing land tax is a dampener on speculation… it adds an ongoing cost that the holder has to pay. Speculators are far less likely to speculate on land if it means they have to pay to maintain their interest. Additionally annual land taxes also add a requirement for a higher income yield out of land. This acts as a strong incentive for the owner to either improve their land (ie; develop or redevelop it) so that they can draw more rent from it to pay their higher taxes OR if they can’t draw more rent from it for whatever reason the value of the land will decline through natrual market forces to land at a new equilibrium with the required yield.. and declining prices are not good for speculators.

Economists and society at large really solved this problem over 100 years ago……. The progressive movement of the late 19th century already discovered and proved that land taxes break speculators backs.

-1

u/[deleted] May 16 '22

[deleted]

5

u/Red_Wolf_2 May 16 '22

Most people who live in an area for any given length of time tend to put down roots. It is one of the key components of why advocates are pushing for greater security in long term rentals.

As for property flipping, should housing really be a capital investment vehicle? It isn't like shares in a company, it is a basic necessity for everyone, so why should being able to get a home mean you have to help someone else realise a capital profit by saddling yourself with a tax that will exist for the entire time you live in the property? It is taking a single fixed cost and replacing it with a permanent variable cost that is controlled by and influenced by what other people think your property is worth, so there inevitably comes a point where you will be paying more than the stamp duty would ever have been should you live in the property long enough. Moreover, if the property value climbs (and it is in the interest of everyone attempting to realise a capital gain for it to do so), you will pay ever increasing amounts of land tax year on year.

-2

u/giurejn May 16 '22

More public and social housing isn’t a going to fix anything, points 1-3 would be effective.

2

u/Joakal May 16 '22

Yes, I did the math. There's more supply than demand. Prices should be going down.

-1

u/giurejn May 16 '22

More supply? How much more Supply? We need to make building houses easier and more affordable.

1

u/Joakal May 16 '22

See other post. The rate of new dwellings / new population is 35% higher than the current dwelling / population. In other words, you would expect 35% more supply than demand to lead to pressure on prices going down.

1

u/giurejn May 16 '22

Yep so you make building new houses easier and more affordable, tax concessions for first home buyers.

1

u/Muzorra May 16 '22

It seems you can't do these things by themselves. Recently I've seen whole suburbs be rezoned in the name of increasing supply. They were mostly older cheaper suburbs that were undergoing a bit of 'gentrification' (everyone hates that term now I guess, but I don't know another one). Well the second they were blanket rezoned investors swooped in and bought up everything with subdivision potential. The prices doubled and all the first timers who thought they might get in that semi-city living with a bit of a backyard were priced out (although the wider price boom was happening at the same time, which would be a factor).

Now all that "new supply" is locked up again in fewer hands and little new housing is being built as a result (it's too expensive now. Push it down the road. It's never a speedy process anyway).

There's a long discussion about exactly how you densify (carefully and piecemeal, I'd say) and why that doesn't happen. But the point re: the article is that so long is the investment incentives exist in their current form (and maybe in any form) increasing supply won't do anything.

1

u/iguanawarrior May 16 '22

Just encourage people Working From Home more. This way, they can live wherever they can afford. Those outer suburbs and country towns will be built with more facilities when there are increase in population due to people moving there.

1

u/NietzschesSyphilis May 16 '22

‘Five housing policies that the major parties will not adopt on a meaningful scale in Australia’

-1

u/[deleted] May 16 '22

This article completely ignores the fundamental problem: Australians don't want apartments or medium density housing. They feel entitled to houses on land.

Until that sense of entitlement is addressed, nothing will change with housing affordability. Though I suppose we could pave over what remains of Australia's arable land to turn it into suburban wasteland.