Best Idea's to Tackle Housing Affordability

tryagain on 16/05/2022 - 23:30

So, after what I view to be underwhelming policies from both the major parties regarding housing affordability, I was wondering what ideas are out there to actually tackle housing affordability, from my point of view there is a fundamental supply and demand issue underpinning it, and policies that attempt to increase first home buyers purchasing power only tend to increase this. Reducing demand and increasing supply seem to me to be the best way forward.

My idea to do this would be to place some limitations around negative gearing, I'd propose that going forward that only new properties are eligible to be negatively geared, and that the percentage of the interest costs that are claimable as a deduction reduces over 10 years to zero (10% reduction every year). I'd also propose that all current properties are treated the same, so as to not overly imposition those who have recently purchased existing investment properties.

It's no silver bullet, but I don't think there is one, and the reality is that we need house prices to at least stagnate for a long time for them to be considered affordable. Interested to hear comments, or what other ideas people might have. Especially way's in which housing is viewed first and foremost as a form of habitation and a speculative investment as at least a very distant second.

Financial

Comments

  • rektrading on 16/05/2022 - 23:33
    +4

    Anyone that dares to touch NG will get rekt.

  • Quantumcat on 16/05/2022 - 23:36
    +3

    Your suggestion will decrease demand for investment properties, which is great, but that will also push up rents (there will always be a cohort of people who want or need to rent no matter how cheap houses are, either they haven't yet saved up a suitable deposit, their jobs are not secure enough for a loan, or they move a lot and don't want the burden of buying and selling frequently). The only thing that can really fix the issue is more supply. Building social housing would both fix the supply issue and fix the social issue of low income families and individuals unable to afford suitable housing. In addition a scheme where long term residents get the option to buy the property at some point that is even better.

    • tryagain on 17/05/2022 - 07:21

      Your suggestion will decrease demand for investment properties, which is great, but that will also push up rents

      Not if it also keeps new housing coming online, rent is also subject to supply and demand.

      • Quantumcat on 17/05/2022 - 08:19
        +1

        It will stop new housing coming online so it will reduce supply. Demand will reduce a little bit (when some people who are renting can afford to buy) but not as much as supply will reduce.

        One reason rents have gone up so much lately is that with the low interest rates, people have been buying 2nd or 3rd homes but not renting them out, instead keeping them as holiday homes so they sit empty and reduce the supply of rentals. The higher interest rates coming may start to help rent costs when these people change their minds and sell them or turn them into rentals.

        • tryagain on 17/05/2022 - 08:46

          It will stop new housing

          How do you come to that conclusion?

          • Quantumcat on 17/05/2022 - 08:47
            +3

            @tryagain: Because less people want to invest and rent out a house.

            That means there will be more houses available for people to buy and live in, which is good, but that doesn't help people whose circumstances mean they can't buy and need to keep renting. The number of properties available to rent will reduce by more than the number of people needing a house to rent will reduce.

            That's why an investment in building social housing will be better, as that both reduces the number of people wanting to rent (the lowest income will get a social housing house, so less competition for normal rentals for the ones with middle or higher incomes), and increases the supply of houses (especially if the tenants are allowed to buy them later and then the social housing house enters the general pool of houses that can be bought/sold/rented).

            • tryagain on 17/05/2022 - 12:33

              @Quantumcat: There would be still negative gearing (to a lesser extent) but only on new residences, yes this would take some investors out of the market, but those that remain would be more likely to invest in new builds. This should take care of supply. Social housing is great for the really disadvantaged, but with the rate of home ownership, it's a lot bigger than that.

  • Benoffie on 16/05/2022 - 23:46
    +9

    There is no shortage of actual housing. There is merely a shortage of affordable housing, housing available for rent etc. They are not the same thing.

    The ridiculous argument of simply build more houses ignores the basic math. And pursuing a populate or perish policy is oh so 1950s.

    • tryagain on 17/05/2022 - 07:28

      There is no shortage of actual housing. There is merely a shortage of affordable housing, housing available for rent etc.

      Yes, but as soon as you stop new properties coming online, that equation changes, you can't view the issue as a snapshot in time.

    • Quantumcat on 17/05/2022 - 08:46

      There is no shortage of actual housing. There is merely a shortage of affordable housing, housing available for rent etc. They are not the same thing.

      It is the same thing - with less housing, there is more competition for what there is, so prices are high, and there isn't much that is affordable. If there was more housing, there would be less competition for what there is, and there would be more affordable housing.

      It is true that housing available for rent is not the same thing, but only when people own multiple houses and leave them empty.

    • Nugs on 17/05/2022 - 09:24
      +1

      "And pursuing a populate or perish policy is oh so 1950s"
      totally agree with this, growth for growths sake
      .

  • trustnoone on 17/05/2022 - 00:07
    +3

    I have no idea if it helps or hinders as essentially everything can have a negative outset but my thoughts are:

    • Reduced LMI or government backed LMI and stamp duty removed for your first property under $x. The biggest issue I see with quite a few people is being able to start. Many people are paying $450 a week on rent, but not able to get a $450 mortgage because rent takes away a majority of their savings to start a deposit, so they essentially have to double save PLUS LMI PLUS Stamp Duty in many states.
    • Supporting country towns in particular for industries/tourism/ and especially transport (legit property is cheap in regional towns, but there's no jobs out there so everyones leaving to the city) its "supply and demand for a particular area" which is an issue.
    • Increased land tax on foreign investors (going into helping housing/regional communities/social housing)
    • Increased land tax (or similar) on un-occupied investment properties over xx months (or similar) (going into helping housing/regional communities/social housing) so people will want to rent their place out (even a lower cost) so it doesn't go towards tax.
    • tryagain on 17/05/2022 - 07:38

      Some good ideas in there, I think some are already in place somewhat. Some are hard to police, like overseas investors buying in realitives names that already live here.

  • Almost Banned on 17/05/2022 - 00:24
    -6

    My idea - avoid incorrect and unnecessary apostrophes.
    It may not make housing more affordable, but it will make you look less foolish.

    • tryagain on 17/05/2022 - 07:34
      +2

      ,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,

  • SF3 on 17/05/2022 - 00:27

    A more fundamental problem is, when there is money to be made, people will trade and game it.

    It’s like security and regulation, making it harder doesn’t stop people from trying, they’ll just find new ways to “break in”.

    I think OP’s username checks out.

    • tryagain on 17/05/2022 - 07:33

      when there is money to be made, people will trade and game it

      I don't disagree, that's what my last comment is about, need to make it less attractive as a speculative investment, but in reality we still need investors.

  • AustriaBargain on 17/05/2022 - 01:02
    +1

    We should go back to the old days where being a landlord was a profession, it was something you did, rather than something you invested in because the houses you bought were going to be worth twice as much 10 years from now.

    • rektrading on 17/05/2022 - 01:45
      +1

      People work smarter nowadays.

  • [Deactivated] on 17/05/2022 - 01:25
    +4

    I think it really is as simple as supply and demand. There's a finite supply in the handful of areas most people want to live, and the demand just keeps increasing.

    It would be possible to increase density, but then not everyone wants to live in an apartment. We could also reduce demand by limiting investment, immigration, and foregin buyers.

    The other option is increasing supply of more affordable housing in areas that have less demand, and making them more desirable by also building in services such as transport and zoning for commercial, and including incentives for people and companies to move there.

    Or we can just do nothing like we always do. That seems like the most likely option.

    • orangetrain on 17/05/2022 - 09:38

      Is there a shortage of housing? Source?

      • [Deactivated] on 17/05/2022 - 11:33

        No, there's a shortage of your ability to comprehend what I wrote. BBQ sauce. Let me repeat it for you though, there's a finite supply built in the areas many people want to live.

        So in these specific areas, demand exceeds supply. This is what drives up prices. In a free market, buyers compete on price, and the highest bidder wins.

        If the situation was reversed, and supply exceeded demand, then sellers would have to compete with each other to sell. All else being equal, price would be the main area of competition. They would have to lower their price, or lose the sale.

    • Toph Beifong on 19/05/2022 - 13:28
      +1

      Most sensible answer I've heard here. At the end of the day it is a supply and demand matter. Demand is inflated because we have property investors competing with first home buyers, competing with families wanting to move homes, competing with new arrivals.

      Also not in governments interests to decrease property prices - they get more stamp duty and government charges. Not in banks interest- they get more interest on their loans. Not in existing home owners interest because they don't want to see their property value decline. At the end of the day, something has to give here.

  • Noy on 17/05/2022 - 01:32
    +1

    I recently received a revaluation on my rental unit and that means my cost of owning the unit will increase due to rates, water, sewerage costs and taxes going up. I worked it out that I will need to increase the rent by $10.00 to $15.00 per week to just maintain the coverage of the additional costs of ownership with nothing extra for me over what I currently get as a return on my investment.
    There is a fixed amount of land and as as costs go up so does the cost of housing for building…..trades, materials etc. Maybe the answer would be a limited mortgage interest payment amount be permitted as a an income tax deduction on the principal house owned to encourage more home ownership for everyone instead of reducing taxes for the super rich people.

    • tryagain on 17/05/2022 - 07:42

      Yeah, I think the tax system needs to fundamentally benefit the buy to live not the buy to invest buyers, it seems the wrong way around at the moment.

  • Geekomatic on 17/05/2022 - 02:58
    +2

    I read this some time ago and kept it because I wasn't aware that multi-property owners were using NG to offset their frigging income! No wonder the "haves" want it untouched— it's BS if this is what's actually happening.

    "Negative Gearing (NG) is used by every business or investment, and occurs when expenses exceed revenues, and the loss is carried forward to offset against future taxable income. In relation to investing in property, NG is 100% not a rort. The rort is being able to use NG property losses to offset against other income. There should be no offset of NG losses against any PAYG or other income. Simply change the rules so that any NG loss someone makes on an investment property can ONLY be offset/used against any future taxable income from that same property. If there is no future taxable income from that specific property, then the NG credits are lost/worthless. This is working well elsewhere in the world (I think in the UK, for one). Fair, simple, clean, and still providing the intended benefits…but specific to the asset that it relates to.

    The real rort (and cost to Government/taxpayer) is the huge amounts of NG losses that are being used to shelter many other forms of income from the tax that should be paid."

    • Almost Banned on 17/05/2022 - 12:07

      The ability to offset losses against income enables property owners some benefit to have rents that are below the cost of the investment. The trade-off is capital growth, not income growth.
      You want rents to be set at full cost recovery from day one - go ahead and see how it works out.

  • EightImmortals on 17/05/2022 - 07:11
    +2

    The main problem of course is that housing has turned into an investment vehicle rather than a home.

    • tryagain on 17/05/2022 - 07:43

      Yep

    • rektrading on 17/05/2022 - 08:05
      +3

      Real estate has been an investment vehicle for hundreds of years and is one of the best ways to keep savings from being eroded by inflation.

      • EightImmortals on 17/05/2022 - 08:37

        Yep that's the other side of the equation.

        And that's OK until basic housing becomes unaffordable to the average wage earner.

        I did the sums a while back and (from memory) the cost of a home in 1965 was around 2.5X the average yearly wage. When I did the calculations (maybe 10 years or so ago, way before the current boom) it was around 7-8X the average wage. Somthing's gone out of kilter somewhere. I suspect the normal economic cycles will kick in and some point and a price correction will occur…I've been expecting that for a while though, ever since we didn't correct with the U.S and U.K. markets back in 2008. :)

      • SBOB on 17/05/2022 - 08:48
        +1

        Real estate has been an investment vehicle for hundreds of years and is one of the best ways to keep savings from being eroded by inflation.

        yep..doesn't mean the government has to continually have policies that artificially help boost such an investment option.

      • orangetrain on 17/05/2022 - 09:00

        Wow, I can't believe rektrading is advocating removal of remove negative gearing, FHB, etc which will lead to a house price correction. After all, it originally worked fine for hundreds of years!

  • pegaxs on 17/05/2022 - 08:02
    +8

    Don’t let “investors” buy 20 houses. There should be a cap on the amount of houses any one person of company can own.

    Also, stop/severely restrict foreign investment. The Australian housing market has just become one huge Ponzi scheme through foreign investors throwing money at houses at any cost.

    Restrict things like Air BnB. These should be treated like commercial premesis and should come under the same restrictions as motels and hotels.

    And for all the negs in the world… remove negative gearing. Ok, if the housing market was struggling and needed a kickstart, use it as an incentive, but now, it’s basically welfare for mum and dad investors.

    TL;DR: We need to de-incetivise houses as purely investments only and make them back into family homes.

    • Quantumcat on 17/05/2022 - 08:23
      +1

      Don’t let “investors” buy 20 houses. There should be a cap on the amount of houses any one person of company can own.

      There's no way regulation can stop that. People can open new companies or have them owned by their spouse or child.

      • orangetrain on 17/05/2022 - 08:36
        +2

        Two home per human cap sounds reasonable

        • Quantumcat on 17/05/2022 - 09:00
          +2

          The problem there is that in most European countries, the conditions for renters are very good (they can get long term security, are allowed to make modifications like putting in a new oven or landscaping the back yard etc). The reason for this is that nearly all rentals are owned by a company that has a massive number of properties. That company then has a large appetite for risk (they don't care if a tenant breaks something that needs to be fixed as they have so many properties that it doesn't change their income stream much, unlike a mum and pop investor who is paranoid about a little hook in the wall or a pet, as that property is all they have so anything that happens to it could ruin them). A company will also be unlikely to suddenly need to sell a property (since they have so many) and they certainly won't need to move in suddenly either so people don't get evicted suddenly for no reason like they do here. By restricting how many properties someone can have you are making it so that all investment properties are owned by mum and pop investors and none are owned by corporations, which means poor rental conditions for everybody who rents. Whatever the regulation there is, it should discourage mom and pop investors and encourage lots owned by single corporations for better renting conditions.

          • orangetrain on 17/05/2022 - 09:02
            +3

            @Quantumcat: That's why I prefer a vacancy tax. Even in your case, a company with a monopoly in a town can jack a the prices sky high even with lack of tenants.

            • Quantumcat on 17/05/2022 - 09:02

              @orangetrain: Good point.

              • moar bargains on 17/05/2022 - 13:07
                +1

                @Quantumcat: I have heard the idea of encouraging more corporate investment in property at the expense of individuals in the past, and think the idea has merit, but the thing that has always given me pause is that corporations haven't exactly been shown to be entirely benevolent all the time in the past. They have well established track records of putting profit above people.

                However I'm not sure that that is very much different to the current situation, so…

                • Quantumcat on 17/05/2022 - 13:09
                  +1

                  @moar bargains: That's true, we should be wary of giving private corporations power over people's lives, especially where they live - it would be interesting to research how it works in those European countries though, and what other things are different that allow it to work well

                  • moar bargains on 17/05/2022 - 13:11
                    +1

                    @Quantumcat: Absolutely - I think a close examination of the European style certainly warrants closer inspection and public debate.
                    There's also a cultural psyche change that would need to go along with that though, to get away from the "Australian (and British, and American) Dream" of a quarter acre with white picket fence…

          • SlavOz on 17/05/2022 - 17:40

            @Quantumcat: lol very true. Worst thing is when you rent a house in a popular holiday spot. You pay the owner's monthly mortgage just for a 2-3 day stay, and all you're allowed to do is sleep in the beds.

            No noise after 9pm, no guests, no smoking anywhere on the premise, no fun, and no convenience or you lose $2,000 bond.

            The whole system is a complete rort.

      • rektrading on 17/05/2022 - 08:52

        Restricting people from owning properties is a very North Korean style.

        • orangetrain on 17/05/2022 - 08:56

          Isn't it also USA/UK style? There's a reason Murdoch quit being Australian due to foreign ownership laws in USA. Now a foreigner controls the narrative in Australia.

    • Danstar on 17/05/2022 - 10:18
      -4

      Maybe should change "investors" to foreign investors.

      Why should people who've earnt the right to purchase multiple homes be limited because of people who struggle to afford ?

      What is the root cause of the people who can't afford a house? Instead of punishing the 'rich', maybe the 'poor' should work harder and not look for handouts.

      I know this comment is going to get negged hard, but it's a hard truth.

      • pegaxs on 17/05/2022 - 10:47
        +1

        “mAyBe tHe pOoR sHoULd jUsT wOrK hArDeR!!1!11!!!”

        Yeah, ok Scomo, we can’t all be CEOs and tax payer funded shills for rich people and large corporations.

        (fropanity) me, I know a lot of single parents that work 2 or 3 jobs just to get enough money to barely keep a roof over their head, all while some fat, lazy, trust fund receiving (fropanity) tells the poor to “just get better jobs”.

        but it's a hard truth.

        It’s not a hard truth, it’s a piss poor opinion made by someone who sounds like they have never had to struggle. I work with a lot of disadvantaged kids and families in my area who don’t accept hand outs and who work their arses off just to stay alive and it’s good to know that I can fix it all just by telling them “you just need to work harder…”

        Maybe, just maybe, the poor wouldn’t be so poor if the rich arseholes at the top didn’t just buy up all the houses and then rent them back at extortionist prices. There is no reason that some rich (fropanity) needs 20 houses other than to further entrench the poor deeper into the wealth divide.

        • Danstar on 17/05/2022 - 11:43

          Then they’re doing something wrong.

          Don’t assume my situation, as I’m sure I’ve had i harder than most people you know and I’ve come out “on top”

          I’m not Rich, but I am far from poor / struggling. I’ve had no financial aid from family, if anything I help them too.

          So yes. Work (fropanity) hard, priorities what you spend your money on and you will get there!

      • Some Human on 17/05/2022 - 11:31
        +1

        I agree. A big part of it is about priorities.

        Some of the humans I work with have been renting for 30 years. They “never have any money”. They’re always paying off their cars. They eat out regularly. Always have the latest $2.4k iphone. Only wear the same clothes once.

        They cry about housing being unaffordable, yet were working full time 30 years ago when houses were cheap. If they’re telling me they couldn’t save enough money for a house deposit in that 30 years, then it’s obvious to me they’re serial poor decisions makers.

        Then there’s this friend of mine who spent the better part of his 20s on the dole (living with mum). Now that he’s started working, he is complaining that he can’t save enough for a deposit on a house in (crap suburb). It’s like, dude! You live with your mum and work full time. Maybe you should have forgone that new phone, smart watch, Xbox x series, ps5, all the games you bought for them, anything else you bought to try and look rich.

        Next we have double income couples earning the average Australian wage. The keeping up with the Jones’s types who can afford to pay $650 per week in rent for the best house on the best street in the best suburb, yet can’t afford to buy. Rent something cheaper in a slightly less desirable suburb until you save enough for a deposit. Stop eating out at expensive restaurants. Do you really need to “upgrade” your car every 2 years?
        You can live your life after you secure housing.

        One time in 2010 or thereabouts, I spoke with someone who told me he and his wife had spent 2 years straight working 2-3 jobs each. They had one day off per week. They saved enough for a very sizable deposit on a nice house and didn’t spend that long paying it off. They were in their mid 20s when I spoke to them and had just started a family. She gets to stay home with the babies while he works just 1 job.
        They lived the good life after the hard work was done.

        • Danstar on 17/05/2022 - 11:44
          +1

          Exactly right. Can’t afford a home, yet go on lavish holidays, latest tech, eating out regularly

          “BuT hOuSe pRiCeS sO hIgH”

    • SlavOz on 17/05/2022 - 15:33

      Also, stop/severely restrict foreign investment.

      Very unWoke of you. Sounding like a bit of a racist now. What's your problem with foreigners having a crack at the Australian dream? Aren't we all about loving everybody and ultra tolerance?

      Restrict things like Air BnB.

      Restricting the rental market is going to hurt renters more than landlords.

      If people can't rent a house down by the beach for a weekend, then they might just buy it instead.

  • Zeph101 on 17/05/2022 - 08:49
    +1

    Crazy thought.. if you want a flood of properties in the market, make an incentive to dispose of rental properties by removing CGT.
    investors then have the incentive to sell, could flood the markets with properties to drive the prices down.

    Not saying it's a great idea or even a good one long term but a crazy one.

    Govt would lose heaps of revenue but maybe brownie points for making housing affordable.

    • orangetrain on 17/05/2022 - 09:48

      The government would lose tax revenue how?

      Negative gearing apparently cost $13 billion in 2020
      https://www.smh.com.au/politics/federal/negative-gearing-cos…

      • Zeph101 on 17/05/2022 - 09:55

        Thats a good point that the Govt would regain the negative gearing lost in the long term. In the short term ,there would be a massive hole from a loss of CGT I would think.

    • donga100 on 17/05/2022 - 10:41
      +1

      What do you think the investors would use the money from those sales for?

    • moar bargains on 17/05/2022 - 14:12

      This is a good thought, but I think it actually goes the wrong way. One of the issues is that there is an interplay between NG and the CGT discount, which incentivises people to forgo some rent now which would be taxed at full marginal rate (but is reduced with negative gearing), with the hope/promise of higher capital gains later which (assuming a property is held more than 12 months) is only taxed at half your marginal rate. So there's a win through lower taxation on both the rent now and the capital gains in future.

      So I think the CGT should stay but the CGT discount should go. However, there should probably be an "amnesty" period where it is either phased in over 5 years, or introduced in 5 years or something like that.

  • orangetrain on 17/05/2022 - 08:50

    Vacancy tax on residential AND commercial.

    Those with holiday homes are usually married, so just claim PPOR exemption for each property.

    Those commercial speculators are killing so many businesses with high rent or leaving it empty which means less customers. Why? Because they hope a developer comes along and build apartments!

    NG does nothing to stop billionaires/foreigners playing monopoly by buying many homes outright and letting it sit empty!

    Vacancy tax a % on property valuation:
    - More rental tax revenue and vacancy tax revenue.
    - Less rent for residents in some areas.
    - Less rent for businesses in some areas which boosts the economy.

    Otherwise NO ONE benefits from these empty places except the owner.

    Those empty houses/plots/shops are a silent blight and cause stagnation. I saw this empty plot very close to Sydney Central: https://maps.app.goo.gl/NycuLBWLJVpDQcrS8

    There are potentially millions of these empty places sitting empty.

    Note: Land tax is great but I believe it's a sledgehammer approach that not just punishes single house holders and those renting out places but also the businesses trying to rent out places.

    • Quantumcat on 17/05/2022 - 09:01
      +3

      Vacancy tax is a good idea. That actually helps supply.

    • moar bargains on 17/05/2022 - 13:30

      I think it's an idea worth investigating, but I don't know how many properties this will really affect? One estimate I saw on my 10 second google was ~300k homes, or ~3% of Australia wide so I dunno about millions. 3% spread over the entire country is unlikely to cause much of a "flood of properties" in any one area is it? Sure there will be some areas which have a larger proportion, and some that have none, but surely that's only going to (appreciably) bring prices down in areas where there are a substantial number sitting empty?

      And then there's the question of how we would classify and find "empty" properties?

      • orangetrain on 17/05/2022 - 13:51
        +1

        Easy to find empty properties with ATO:
        - PPOR exemptions apply to one.
        - Vacancy tax is applied as % of property. At tax time, claim it against rent paid. Ie. A $1M x 0.5% = $5,000 ($96/w). Which is easy as typical rental yields are 2% or $20,000. They can report the rental income.
        - Only got $2,500 rent? Pay only $2,500. Ie $0 rent return after tax
        - Try to lease place for 100 years for $1 to wife? ATO says: cough up $4,999 this year!
        - Same concept with businesses

        Yes, an owner can use his wife to pay bare minimum but tax on that $5,000 per year is infinitely more than receiving $0 tax from a owner that keeps their house empty for a hundred years.

        I would like to know how many properties there are. It's ridiculous to see so many grass plots with wire fences in Sydney!

  • Jason Genova on 17/05/2022 - 08:50
    +1

    best idea would be to get rid of the current government, who do everything in their power to prop up the house of cards (as all the pollies are investors themselves)

    no foreign ownership allowed also (how come we cant buy houses in china? hmmm)

    • orangetrain on 17/05/2022 - 08:53

      But how else can I get a $880,000 salary?

    • tryagain on 17/05/2022 - 16:01

      I don't think that is going to change the situation much, maybe last election, but this time their proposed policy won't make any difference.

  • GordonD on 17/05/2022 - 09:06

    I would suggest a virulent virus that mainly only kills old people, people like me, so their homes come onto the market and lower the cost enough that young people can afford them.

    Frankly, I can't think of anything else that would fix the economic problems created by large scale long term immigration created, then the government throwing huge amounts of money at people to keep the economy afloat so they wouldn't look bad during the last couple of years of shutdowns. Far more money than people sitting at home could spend, so they "invested" in the thing that was rising rapidly in price during that period. Since both those things were not so much political decisions as things the government of the day did because the economists advised them to to do them, so they did, perhaps the solution would be a virulent virus that kills off all the economists. Pretty much everything they told us to do - huge immigration, killing off our industries, throwing money at keeping the economy afloat - have turned out to be disasters.

    • rektrading on 17/05/2022 - 09:14

      I would suggest a virulent virus that kills off large numbers of old people so their homes come onto the market and lower the cost enough that young people can afford them.

      Someone tried that and failed.

      It looks like they're now trying to control the food supply by buying up prime farmland.

      The strange thing is that food warehouses are getting burned down all over the place.

  • Duckie2hh on 17/05/2022 - 09:18

    Removing NG will essentially remove investors out of the housing market which will remove available homes for rentals. This may aid in people purchasing their PPR homes, but it will essentially kill off the rental market. Won't the problem be worse? There are 2.6 million households that are currently renting*.

    My recommendation would be for government to create "new development zones" where there is less/no land restriction. This development zone will have high level infastructure, schooling, health facilities and more importantly, large businesses (which could be incentivized by low taxes and rates) to stimulate employment in the area. Connection between this new development zone to the capital city with a high speed rail will then further promote the concept of living outside of capital cities.

    *reference: https://www.aihw.gov.au/reports/australias-welfare/home-ownership-and-housing-tenure#:~:text=32%25%20(2.6%20million%20households)%20were%20renters%3B%20where%20landlord,105%2C500%20households)%20from%20other%20landlords.

    • orangetrain on 17/05/2022 - 09:52

      I'm sure some renters would be happy for rental market to be killed when they can buy their own home.

      • Quantumcat on 17/05/2022 - 09:58

        It will hurt the other ones though, the ones that can't buy and have to keep renting

        • Duckie2hh on 17/05/2022 - 10:47

          Yes, any remaining rental service providers (aka landlords) would dramatically increase prices to cover the loss in NG as well as the drop in supply.

      • Duckie2hh on 17/05/2022 - 10:45
        +1

        This is true, but not all renters can afford the outlay of 5-20% of a $700,000 (conservative) for a new home.

  • pharkurnell on 17/05/2022 - 09:44
    +1

    Havent we done this topic several dozen times this year?

  • hellousyd on 17/05/2022 - 09:51

    There’s too many factors that need to line up in order to produce accessible and affordable housing. For example, one thing I’ve noticed whilst working in the construction industry is the sheer amount of time and effort that goes into building a house. Labour easily accounts for half the construction cost. If homes were less ‘fancy’ and people were ‘willing to compromise’, we could build so many more.

    Also, land. The government is really cunning in the way they release land. Some areas don’t see any subdivision (e.g. Dural) whilst others right next door (e.g. Box Hill) are fully zoned for residential. To further add to this, this information is only released to select individuals who are able to massively profit off the conversion. (If you think there is no such thing as insider trading and people getting away with it, sorry you are delusional).

    I think if we realllly truly want to make a change, we should do the following:
    - Implement land zoning that can only be used for affordable housing
    — In this area one person or couple can only own one dwelling
    — Make the dwellings extremely simple to build (still nice to live in but not gigantic or luxurious, most homes 100 years ago didn’t even have the toilet inside. I’m not saying do this but people need to lower their expectations to decrease construction cost).
    — Get rid of the idea of freestanding homes entirely. Other countries in the world only have appartments. I don’t think it will kill us to do the same. Plus you can add nice amenities to incentivise people, such as parks, grocery stores, schools, gyms etc. nearby.
    — If there are rental dwellings in this section, cap the rent to a maximum of 33% of an average individuals post tax income. If there are two people working, this is even better as less of their money will be going towards rent.
    — DON’T TREAT THESE DAMN HOUSES AS AN INVESTMENT. This is the main underlying problem.

    The problem is that we humans are greedy. And I guess it isn’t entirely our fault as well. We need to be greedy and invest our money due to factors like inflation etc. I guess this blame falls mainly on world governments and going off the gold standard. When people go to sell their house decades later they want it to be many multiples of what they originally paid. This also contributes to higher prices and unaffordable homes.

    With everything above being said, I don’t think it will ever happen. Humans and governments are too greedy. And our greed is what has gotten us here so far (technology wise etc.). I’m no economist or political science student so feel free to correct me. Just my 2 cents. I can learn more by hearing from you guys!

    • orangetrain on 17/05/2022 - 10:08
      +2

      On the other hand, due to lack of some regulation with apartments, there's huge pressure put on houses as a home instead. Who wants to risk getting a bill for millions when cracks appear?

      Ergo, more regulations (for apartments) could bring house prices down.

      • hellousyd on 17/05/2022 - 10:23
        +1

        Really good point. I agree 100%. There's just corruption across the entire board.

      • SlavOz on 17/05/2022 - 15:36

        lol regulations are what caused this mess in the first place. Your solution is to have more regulations to tackle the problems caused by too many regulations?

        • orangetrain on 17/05/2022 - 16:14

          The lack of regulations for holding developers accountable in NSW has cost unit owners millions if not billions in rectifying building defects and poor PR has seen unit prices stagnate or go down as buyers are put off or request premium reduction in sell price.

          • SlavOz on 17/05/2022 - 16:54

            @orangetrain: More regulations means the developers incur even more costs which means prices go up.

            Apartments are a shit deal because of the limited ownership rights and strata fees, both of which are influenced by poor regulation in the first place.

            Less regulation, less problems.

    • brendanm on 17/05/2022 - 20:08
      +1

      Get rid of the idea of freestanding homes entirely

      No thanks.

  • [Deactivated] on 17/05/2022 - 09:52
    +1

    Low-interest rates are the main reason for the explosion of house prices. Would anyone dare to buy at these prices even with 5% interest rates? I don't think so. Increasing interest rates now will be fatal for many. It is a systemic issue that governments propped up for their income from sales. Get into the market hook or crook. Governments don't allow house prices to fall.

  • GordonD on 17/05/2022 - 10:02
    +1

    There is saying attributed to Albert Einstein that says you can't solve a problem with the same thinking that created it.

    That is not a suggestion to vote for the other party to run the country. Labor is just as responsible for the housing price problem in Australia as the other lot. It thinks the same. That is evident from the fact both of them are offering voters policies that would solve the political problem of it being too hard to buy a home by methods that would push the price of housing even higher.

    • tryagain on 17/05/2022 - 15:57

      I'm going with let's lessen that part of the cause, but your right, both of the majors sing from the same song sheet, neither of their policies do much more than pay lip service.

    • SlavOz on 17/05/2022 - 15:58

      Exactly this. The housing crisis was caused by government interference. Both Liberals and Labor have had a hand in this.

      This happens to everything the government touches. As soon as they stick their fingers in, prices go up. The answer is to do away with government policy and let housing go back to the free market.

      Deregulation is the answer. Let us control our own way of living. In Europe, it's very common for families to build multiple houses on a piece of land. Many people do this advance so their children have a place to live when they get married. You can't do that here. We've essentially criminalised land sharing. Building a granny flat is heavily restricted and the paperwork alone is like $30k of fees. In some cases, you're not even allowed to have multiple families living in a house unless it's "approved" by the government. Are you (profanity) kidding me?

      My parents own a 3 acre block and live on a tiny house tucked away in the corner. You could easily fit another couple of free-standing houses on there, but we're not allowed. Nope, if you want to build another house, you need to buy a seperate block for $600k first. Yeah right.

      As for housing used as an investment, people only do this because the dollar is going to shit. Australia is the country with more money than toilet paper. Makes no sense to leave your wealth the bank while the government prints more stay-at-home money during the pandemic. Of course people are going to look for a way to protect the value of their wealth. Another example of the government creating problems that cause more problems.

  • tsunamisurfer on 17/05/2022 - 16:03
    +1

    I don't think housing affordability is something that can be fixed. My reasoning as follows :

    1) There is no political party that will invoke policies that will result in the decrease in residential property prices (if there are; a) they won't get into power or b) they will be ousted in the next opportunity because the opposition will use that against them by scaring the mum and dads).

    2) Tweaking the demand side will simply increase prices in this already heated market, hence undoing a lot of the 'good' this policy tries to achieve.

    3) Tweaking the supply side similarly causes problems with inflationary pressures on labour and materials costs, especially in WA.

    I am left to think the gov should just keep their hands off the market and let the market adjust accordingly after years of interference.

    • tryagain on 17/05/2022 - 16:05

      I am left to think the gov should just keep their hands off the market and let the market adjust accordingly after years of interference.

      So totally remove negative gearing?

    • SlavOz on 17/05/2022 - 16:58

      Spot on. Deregulation is the answer. Both Libs and Labor do not know the meaning of the word. Everything for them is the classic Australian mindset of - if it exists, we need to control it.

      Housing is just too political now. Anything you do to change it will heavily polarise large groups of people, and no party has the balls for that.

  • FourSquareMan on 17/05/2022 - 21:40

    Good quality houses are cheap in Australia …
    it is the LAND that is expensive!

  • lainey13 on 18/05/2022 - 10:00

    More punitive empty property tax.

  • Gros21 on 20/05/2022 - 09:07

    social housing isn't an option
    Whats the cost for an average house 500k+ helps lets say 3 people. Plus there is no one to build them.

    Telling investor tehy can only charge xxx is crazy its there property they can do with it as they like.

    The govt used to have scheme that if you gave subsidized rent you got a tax break.

    But even then there is simply not enough propertys, its hard for people in there 20's.

    But if people are desperate there is still cheap available in reginal areas you simply can have everything.

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