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A housing market that I'd like to see

This is an edited extract from an address given to the National Press Club by Susan Lloyd-Hurwitz, chair of the National Housing Supply and Affordability Council on September 4 2024.

Our housing system is simply not working. Prices and rents are growing significantly faster than wages, 170,000 households are on public housing waiting lists and over 120,000 people are experiencing homelessness.

The pressure on households is considerable. Since January 2020, house prices have risen by over 30% in capital cities and over 50% in regional areas. The median house price has reached 7.7 times median household income, close to historic highs. Since interest rates started to rise, repayments for borrowers have increased by as much as 60%.

Home ownership rates are falling, particularly for younger households. In 2001, the year my daughter was born, 51% of 24-to-35-year-olds owned their home. Today, just 43% do. She’s now 24 and we can clearly see the challenges presented to her generation in terms of accessing home ownership where there isn’t housing wealth to pass on.

Renting is no easier. Renters in the private market have experienced a sharp rise in rents of almost 40% since January 2020. Paying the rent now consumes a record 32% of household income on average. Imagine the stress, maybe you’re experiencing it yourself, of coping with the rising cost of living and wondering where the rent is going to come from.

Housing is important to everyone, to our families and our children. It is clear that the community, including government, now recognises that this is one of the most important issues of our time and that we all have a role to play. It is puzzling to me why, given the acute situation we are in, that we don’t prioritise the housing system more than we do.

Let’s unpack some of the causes of this crisis, the outlook for the next five years, and explore five areas that can take us forward.

Causes of the current crisis

The Council recently released our first State of the Housing System Report, and as you would expect, it paints a grim picture, driven by long term structural and cyclical factors. Beneath the ebbs and flows of cyclical challenges there are numerous entrenched structural constraints that limit housing supply and reduce affordability. I’m going to briefly call out just seven.


Source: National Housing Supply and Affordability Council

There is a limited supply of suitable land for housing. Where land is available, sites can be highly fragmented or have limited enabling infrastructure, such as water, sewerage, power, roads and rail connections, or suffer from restrictions that limit the optimal use of land.

Our planning approval systems are too complex and too slow. Arrangements vary across states and territories and across the more than 500 local governments that provide planning consent authority. The frameworks and processes that dictate what gets built, and where, are hugely biased against change.

We have under invested in social housing. Social housing as a proportion of all housing has fallen over recent decades, while demand has soared – wait lists for greatest need households are up 52% since 2018. Given Australia’s remarkable and unparalleled record of 31 years of economic growth with only one short COVID induced recession, how can that be a fair and just outcome for our country?


Source: National Housing Supply and Affordability Council

How we finance new homes is a major constraint. We rely on households to provide financing for new homes through off-the-plan pre-sales, or committed construction contracts, and we put plenty of barriers in the way of foreign investment. Both of these serve to reduce the sector’s capacity to respond quickly with supply to meet demand.

Various features of our housing system, notably stamp duty, mean that we don’t use the housing stock we already have as efficiently as possible. Almost 4 million dwellings had 2 or more spare bedrooms on the night of the 2021 Census. And the growth of the short-term rental market through platforms such as Airbnb and Stayz has removed existing stock from the long term rental market.

We’ve had decades of weak or even negative productivity growth in the construction sector, reflecting the fragmented nature of the sector and low levels of innovation. The ABS estimates that Australia’s construction labour productivity rose by just 0.2% per annum in the 30 years to 2023, compared to 1.3 per cent in manufacturing. Since 2014, construction productivity has been on a downwards trend.

Even if we solved all the other problems, we don’t have enough construction capacity to deliver the homes we need. Cost increases have led to an elevated level of insolvencies in the sector. The construction workforce is ageing, and of those that do enter apprenticeship training, only half complete their course. There is also significant competition for labour coming from major infrastructure builds in New South Wales and Victoria, and from the resources sector in Western Australia and Queensland.

Put all those factors together, and the stage is set for housing affordability to deteriorate further over the next few years, and this from already challenging levels. Under current policy settings, we are likely to fall 260,000 dwellings short of the target of 1.2 million new homes within five years. Both rents and house prices are forecast to continue to outpace inflation over the next several years.

The median income household now needs around 10 years to save the deposit for the median home. More alarmingly, even those median income households who can raise a 20% deposit could only afford 13% of the homes sold in 2022–23 due to mortgage serviceability. Lowest income households could afford only one per cent of homes sold.


Source: National Housing Supply and Affordability Council

Australia deserves a better housing system. It’s an economic and social imperative in so many ways. Given the significance of the challenges we’ve been discussing today, it would be easy to despair, but I prefer to think of it as a call to action that requires bold measures and innovative solutions.

Let me highlight five areas that require immediate focus to move us towards that better housing system.

Five areas that require immediate focus

Firstly, we need to have adequate investment in social housing. Investing in social and affordable housing, whether that’s by government directly, or by the for purpose and private sectors, makes good economic sense, especially where it offers good access to employment and amenity.

It alleviates the insecurity associated with private rental housing. It reduces homelessness and the incidence of poverty, which in turn generates savings for all taxpayers. In fact, SGS economics estimates that for every dollar invested to bring about the supply of social and affordable housing, the Australian community saves $2.

Ongoing and predictable investment in social and affordable housing also provides a stable base level of construction activity, which reduces the challenges that arise from an inherently cyclical sector.

Secondly, we must commit to best practice zoning and planning systems across the country. We need to remove politics from the assessment process, digitise our systems, and move towards performance-based systems and away from open discretion.

Thirdly, we need to build more capacity in the construction sector. The key to this is encouraging more workers into the sector including through support for training, and skilled migration channels. Government can partner with industry to promote trade careers and attract more people from under-represented demographics, including women and migrant workers.

We should focus on upskilling the construction industry in advanced technologies and processes. This could be supported by increased use of advanced manufacturing techniques in social housing projects and other government procurement and accommodating innovation in building codes and regulations.

Fourthly, we need a better system for renters. More than 30% of Australians rent their home. The number of renters is increasing, and those who are renting are doing so for longer. Renting is the only viable option for an increasing share of the population.

But in many ways our system does not work for renters. Housing quality and maintenance are variable – ranging from excellent to utterly inadequate. Security of tenure can be fragile. We need regulatory frameworks that better support renters.

This could include things such as having a nationally consistent policy regarding reasonable grounds for eviction, no more than one rent increase per year and requiring minimum standards for rental property. The Council does not support rent freezes. They only serve to inhibit supply – the very thing we are trying to have more of.

More institutional investment in housing – known as build-to-rent – would benefit both investors and tenants. Institutional investors need long-term assets with stable income streams, particularly if those assets are less well correlated with other large, well established asset classes.

Institutional investment can drive innovation in design and construction, as well as efficiencies in energy consumption and maintenance. For renters, build-to-rent could improve affordability through increased supply, improve security of tenure, the quality of rental housing and the provision of services.

Imagine having a rental home where you could inspect the property when it suits you rather than in the company of 20 other people in the 15 minutes that the real estate agent allows. Imagine you can live there as long as you like, the concierge knows your name and your pet’s name, you can paint the walls, and repairs are done by the onsite team with no inconvenience to you.

This doesn’t need to just be confined to the medium and high-end segments of the market. Vibrant, mature and at scale build-to-rent markets exist in other countries, notably the US, UK and Japan. But in Australia, the vast majority of rental housing is supplied by individual landlords.

In July last year, the Council released a report on Barriers to Institutional Investment in Housing. Why is it that our institutions invest in this asset class internationally, but not here? It’s largely a nascency problem.

Because there is virtually no market and no track record, institutions, rightly or wrongly, require a significant risk premium which makes the economics challenging. And because there is no market in which to buy and sell, institutions need to create these assets through development, bringing a whole different level of complexity, and an increase in time and capability required.

Fifthly, we need to work towards policy settings that are well coordinated across all levels of government. One of the challenges in our housing system is just how many parts of government are critical to the provision of housing – Commonwealth, states and territories and local governments. And within these levels of government, multiple departments and agencies.

“An Australia I’d really like to see in my lifetime”

As former RBA Governor Phil Lowe noted in his farewell address ‘the reason that Australia has some of the highest housing prices in the world is the outcome of the choices we have made as a society: choices about where we live, how we design our cities, and zone and regulate urban land, how we invest in and design transport systems and how we tax land and housing investment’.

I’ve tried to imagine a world in which we have done all the things we need to do to create a healthy housing market. An Australia in which adequate housing can be accessed by households on all budgets, where there is frictionless transition to appropriate housing that suits the different stages of life. Renting would no longer be a stressful and insecure experience. Generations of families would be able to find appropriate housing near each other, and lifelong community connections could be preserved.

Our health budgets could be spent on preventing poor outcomes rather than remedying the effects of housing insecurity. Our housing system would no longer fail many First Nations people. Those who work in our stores, educate our children, serve our coffee, protect us and look after us when we are sick could afford to live in the suburbs where they work, and our cities would be devoid of excessive commutes.

That’s an Australia that I would really like to see, and I’d really like to see it in my lifetime.

 

Susan Lloyd-Hurwitz chairs the National Housing Supply and Affordability Council. The Council’s “State of the Housing System 2024” report can be accessed here.

 

39 Comments
Rick
September 23, 2024

Interesting to see the comments that a landlord selling a property will decrease the supply of houses for renters while another saying it will increase supply. Changing ownership won't change supply. There is a small group of overseas investors that buys and holds and rarely occupies or rents out the property but it's small. There is room for some tax policy that would encourage turnover and reduce some speculation in property investment. However increasing supply, by building houses, is the only way and building enough so that buyers and renters are not queuing and out bidding each other to find somewhere to live. Constrained supply is the main cause of rocketing prices and the five items discussed in the article are certainly going to help.

Pamela
September 23, 2024

There are also local property owners who now don’t rent out their surplus properties but don’t sell them either due to CGT. I believe this group is under reported. Encouraging them to either sell or return them to the rental market could quickly provide additional housing not currently available.

Ruth from Brisbane
September 29, 2024

Pamela
I know some who are finding tenancy laws promoted by Greens and supported by Labor so onerous they won't rent them out at all. Many have a better standard of living than the owner, who is just trying to provide a service without social security. The Greens answer of course will be to tax them more. Pets are allowed to damage properties and there is no way the bond will cover it. Meantime even more onerous regulations are passed. The situation is particularly bad in Melbourne, where the landlord cannot terminate a lease at the end of a fixed term tenancy, as they call this an 'eviction' which it is not. The Greens are under the illusion this will free up properties for purchase by tenants who are often bad credit risks and would never get a loan, so they are sold to overseas buyers. Meantime builders can't make a profit. The result will be no accommodation for tenants.

Graham W
September 22, 2024

Here in WA and no doubt all around Australia many houses that are part of the Social Housing stock are occupied by one or two retired people. Surely those folk could be moved into an apartment. Just because they paid a subsidide rent for many, many years does not mean that it is practical for this to continue.

Steve
September 22, 2024

A couple of comments on the tax question (CGT, neg gearing). First up negative gearing. Simply this means the expenses exceed the income (ie the "income" is negative). Surely this means the landlord is subsidising the tenant as the true cost of owning the property is more than the tenant is asked to pay. Why is this such a scandalous thing? And you only get back you marginal rate as a refund, you are still out of pocket.. Next CGT. Private owners pay zero tax when they sell, landlords pay capital gains. If you run at a loss on income (ie neg geared) you have to make a profit on the sale ro why would you risk anything? I still think the older system was fairer and better - (a) indexing to inflation so you only get taxed on real gains, which must be dead easy in the modern spreadsheet world and (b) dividing the gain by 5 and applying the tax rate over the whole amount (againm dead easy maths) so lower income earners aren't smashed from a one-off sale (shares you can sell in increments if you want, not so property). Then remove the 50% discount as you have been compensated for inflation already. Might be better for long term landlords, less so for short terms as the 50% discount would be greater. What can be fairer than allowing landlords to claim a deduction for subsidising tenants and getting taxed only on the real portion of any capital gain. But lets be clear, if there is not a reasonable profit to be made, landlords will find other places to invest their money. If you think landlords vacating is a moral win, think again - there are many people who will never be able to buy a property, landlords and rentals are essential. Every landlord that steps away just means one less property in the rental pool. A good example of a pyrrhic victory! Again, more focus on supply would be the best use of any politicians time. Perhaps Firstlinks could find a good author to give a true picture of the supply issues and possible options? It seems every proposal from all sides of politics just ends up pumping up demand. Doh!

Disgruntled
September 23, 2024

If the landlord can not afford to pay the mortgage on that investment property without a tenant in it, they need the tenant as much as a tenant needs a place to stay.

An investor dumping an investment property for whatever reason makes no difference to supply, either another investor whom can afford the payments, extra taxes and charge or whatever then buys the property and it stays a rental or someone who was renting buys it to live in freeing up the property they were renting.

Wildcat
September 26, 2024

In an individual case, there maybe something to your argument. In every case no. There will always be 15-30% that cannot afford a place. As you reduce the supply of rentals the desperation for the increasingly fewer number of rentals will make renting more unaffordable.

Governments must slow immigration so we absorb the recent influx and build a lot of social housing. We must work on demand and supply side issues at the same time.

Disgruntled
September 27, 2024

Immigration is a separate issue... We need enough available housing to support immigration numbers..

My argument is for those that say, using Victoria as an example, Victorian Government has ruined the market for investors, they are selling up in droves blah, blah, blah there is/will be less rental supply.

Against that, my statement rings true.. It's zero sum, someone that was renting buys the place and is no longer a renter and frees up the place they were renting or a more financially well of investor buys it and it remains in the rental pool.

Adam
September 21, 2024

Any expert out there....as a thought experiment, because I cant see any Govt ever doing, what if we had a Capital Gains tax grace period, for existing owners eg. the next x numbers of year is 100% tax free. I own multiple dwellings (through luck and working my ring out) and would probably dispose of these if tax free, even for a lessor value than now......what would that do to supply, existing prices etc etc? BTW . Lease changes have made me chose not to have any permanent leases in place, all properties are on periodic tenancies does this make it more secure for the tenant...I am thinking not, from an owners perspectives there seems to be little benefit. Nobody mentions council regs either. Blue Mountains council has 100s of properties as AIr bnb's because antiquated regs say you cant have 2nd dwelling, yet every third house has an illegal?? granny flat.....this would free up multiple 100s of permanent rental dwellings.

Pamela
September 22, 2024

CGT encourages irrational property investment as the main way to avoid paying it is not to sell so removing it should automatically increase supply. Removing CGT tax on residential property would be an easy way to quickly increase supply. It’s ridiculous to levy CGT on productive assets such as providing a home for someone else yet allow home owners to escape this tax completely! The only reason for doing this is purely political. Like you Adam, I will not enter into residential leases due to the ever changing regulations and would happily sell my spare properties if it didn’t trigger CGT so there would be immediately another couple for new home owners to buy. There seems to be a link between the introduction of CGT in 1985 and the exponential growth in property prices but this seems to be ignored.

Steve
September 20, 2024

I'm a bit confused. After listing issues around supply constraint one of the first improvements proposed is more investment in social housing? Isn't there a supply constraint? Who will build this extra capacity and won't it just rob Peter to pay Paul if we are supply constrained? Nothing really new or imaginative in this article I'm afraid.

Varo
September 20, 2024

The immigration is affecting prices. It does not matter if they are temporary or permanent. While they are in Australia they have to live somewhere. Therefore they will put a strain on an already overloaded housing market. Its no use nitpicking over their status, do they increase demand? yes they do.

Peter taylor
September 22, 2024

Immigration needed for a big australia vision. Rising house prices benefit many people including the goverment agents and finance industries. Falling house prices will not be wanted by many

Not everyone wins. The next generation are being conditioned to be renters most likely in apartments like other crowded cities in the world
Evidently not possible for home buyers to be able to choose a tax deductible home loan interest and pay GST on sale to put them in a similar advantaged position to investors.

Dudley
September 20, 2024

"measured as the years it would take to save for a 20% deposit assuming a 15% gross median household income is saved":

There's the problem - Slow Savers.

Super Saver couples, saving 90% of after tax income, can save enough in 4 years to buy a home, cash on the knocker, no mortgage. Slightly Slacker Super Savers saving 80% will take 4.5 years.

Just need housing costing near $0 while saving. Could be under a bridge, free with job, ..., "The Bunk Of Dad & Mum".

'Bunk of Dad&Mum makes Bank of Dad&Mum unnecessary'
https://www.firstlinks.com.au/financial-pathways-buy-home-require-planning

Saves money, increases occupancy rate, reduces demand for homes.

Trevor
September 20, 2024

Yes, and perhaps a special bank account for homebuyer savers that doesn’t incur tax on interest if they use it to buy a home

Dudley
September 20, 2024

"special bank account for homebuyer savers that doesn’t incur tax on interest":

Or an ordinary savings account which does not incur tax on imaginary (inflationary) interest.
Marginal tax rate 30%, interest rate 5%, inflation 5% results in a loss:
= (1 + (1 - 30%) * 5%) / (1 + 5%) - 1
= -1.43%
Super Savers would not benefit much as they achieve their saving goal in a short time.

At the very simplest, ATO could simply discount tax on interest by a percentage that most closely represents the percentage of imaginary in the interest received by all recipients throughout a financial year.

Darmah
September 20, 2024

It’s called “Real Estate” for a reason.
The law of “Supply and Demand” set’s the price, and people are obviously willing to pay.
If there wasn’t the demand, price’s would drop, as it did in the late 1980’s.
Calls to curb immigration won’t fix a problem that’s caused by societal changes that include a more knowledge based and higher paid work force that wants to live near major city centres and the kinds of homes people consider non-negotiable.
Like a large number of Australians, my family immigrated here in the 1960’s, most of us grew up in relatively small two or three bedroom homes with shared bathrooms, a modest kitchen and usually only one car.
I now live in a regional town south of Sydney that’s experiencing enormous development, the average house that’s being built is at least four or five bedrooms, most with ensuites, multi car garage’s, swanky designer kitchens and media rooms, not to mention the enormous RAM SUV proudly parked in the driveway.
It’s the same everywhere we travel up and down the east coast.
I acknowledge that land values may be high in some areas, but the out of control cost of building these “Mc Mansion's” is surly a bigger Influence on the price, and buyers seem only too willing to pay.
Until we see smaller homes or a massive drop in real estate prices, there obviously no problem.

John G
September 20, 2024

Change the rules for Airbnb and Stayz.
1. Must be rented long term (12 months) before being able to short term rent for up to a total of 6 months. Repeat.
2. Owner occupiers allowed to Airbnb a maximum of 3 times before returning to long term occupancy.

Would move a lot of travelers back to hotels/motels and resorts for their holiday accommodation.

Andrew Smith
September 20, 2024

Interesting how the media ignores Air BnB, but blames international education and students in urban areas for any issues? Meawhile Air BnB has perverse impact in regions of taking away rentals for essential workers like health care, teaching, trades etc.; along with local zoning and planning restrictions for new (apt or high density) builds.

In Europe many cities, which have regulatory responsibility along with body corporates, restrict Air BnB and other short term rentals to 90-180 nights p.a., or ban outright due to the impact on housing for inner city locals, who are compelled to move further out for affordable rents.

Henry Root
September 20, 2024

Couple of thoughts:

Why not go the whole hog. Stop people being Uber drivers. It increases congestion, damage to the rods, pollution etc, and is depriving a taxi driver of an income.

Perhaps you need to ask the question why travelers prefer to stay in a more expensive short-term rental rather than a hotel/motel.

Henry Root
September 19, 2024

"the growth of the short-term rental market through platforms such as Airbnb and Stayz has removed existing stock from the long term rental market."
For an evidence-based organisation:
1. Short-term rentals account for around 1.3% of the housing stock and, it could be argued, is being utilised by holiday makers, concert goers, businesses etc
2. By comparison, according to the latest census, over 10% of the housing stock is empty. Equivalent to over one million dwellings. Second home anyone?
Rather strange, or is it, this large chunk of the housing market, unoccupied / empty dwellings, didn't even warrant a mention.

Steve
September 20, 2024

Just be a bit careful with the 10% of housing stock empty. It just means that on census night many of those people weren't home. We happened to be away the last 2 censuses and I can assure you our house is not an unoccupied/empty dwelling. Don't extrapolate being away on just one night (when the census is done) as anything permanent. Sure, some may be second homes, but certainly not all.

Henry Root
September 20, 2024

Totally agree Steve, let alone the measurement errors.
Accepting your point, in NSW empty dwellings accounted for 2.3% of the housing stock in 1947. At the last census 9.4%, equivalent to 299,524. Seems a lot of people popped out on census night in 2021.

Morag
September 19, 2024

The elephant in the room that the writer has ignored- record high levels of immigration, an issue the government is not interested in addressing as it is being used to prop up Australia's GDP.

Andrew Smith
September 19, 2024

Three is no evidence to support that, but too many RW media, political, finance and property types make same claim.... we don't have 'record levels of immigration', but more temporary residents esp. international students counted into the population via the NOM net OS border movements mislabelled as 'immigrants' for a dog whistle, what else?

International students are <5% rental market, don't buy houses; the latter median prices have stagnated past decade (as boomer bomb retirees & downsizes) and apartment prices/values have plunged, what problem?

Disgruntled
September 21, 2024

There is plenty of evidence to support the statement that immigration is used to boost GDP.

Regardless of immigration status of international students, they are still here, semantics has no play here.

With low birth rates, plus the time and cost of children turning adults, importing thse of working age is an instant boost.

Immigration is also used as wage control. Truck driving is a large absorber of Indian Nationals in this country. Truck Driving wages have gone backwards in real terms as they are willing to work for less just to have a job.

Gig economy is also a large absorber of immigrants, income is pretty ordinary for those workers too.

The immigrants also spend money on household needs, other goods and services.

stefy01
September 19, 2024

As former RBA Governor Phil Lowe noted in his farewell address ‘the reason that Australia has some of the highest housing prices in the world is the outcome of the choices we have made as a society: choices about where we live, how we design our cities, and zone and regulate urban land, how we invest in and design transport systems and how we tax land and housing investment’.

What Mr Lowe should have said is 'the reason that Australia has some of the highest housing prices in the world is because of my complete incompetence'. How is it that he, and the RBA, couldn't see what millions of ordinary Australians could back in 2021/2.

James
September 19, 2024

Last time I checked it was governments that set overall policy and write legislation!

Rod in Oz
September 20, 2024

Yes pretty well agree Stefy. But nor sure that "millions of Australians" also see it this way.
Cheers and thanks for comment.

Alex
September 20, 2024

What are you referring to by "the RBA couldn't see what millions of ordinary Australians could back in 2021/2" - see what, exactly? Where the interest rate was heading? Inflation was blowing up? Bad times ahead?

If millions of 'ordinary Australians' could see these things coming, why did millions ordinary Australians decide to borrow up to their eye balls to borrow non-productive brick and mortar?

Cam
September 19, 2024

Too much red tape, green tape and black tape. Removing tax incentives such as reducing negative gearing, capital gains concessions but also considering first home owner grants and the family home being exempt from the age pension could help.
Moving government jobs to larger regional centres would also help.

Paul
September 19, 2024

170,000 households on the public housing waiting list and 120,000 people homeless. Probably some overlap between these groups.

Unless I am misreading the graph we are building 3000 or so new new public housing residences each year. We are also losing some, particularly in the inner city and I’m not sure if these are accounted for in the 3000.

Now some people in public housing will move on for different reasons but these numbers suggest the problem is intractable.

Public housing and aged care have much in common. Government announces programs but due to shortages in whatever is needed to provide these programs the waiting lists are so long that you are more likely to die than actually receive the benefit.

NDIS is heading the same way unless the eligibility criteria is tightened significantly or the benefits are reduced.

John
September 20, 2024

NDIS is welfare. Governments rarely have the guts to reduce or even contain welfare, as finding "losers" for the 6PM news is trivial and loses votes. Even Bill Shorten acknowledges that NDIS is growing at 18% compound and his "stretch goal" is to reduce that to 8%, still double the inflation rate. Shorten knew that was a pipe dream, so he took a $1m+ cushy job at a 2nd tier university. Combined with aged care cost ballooning and the need to invest (borrow!) more for healthcare given 2.5% population growth, NDIS will cost the Federal Government their AAA rating by 2030, latest. That assumes no regional wars, the government capitulating to the mining industry on IR rules and Labor being replaced by a government that abandons Net Zero mandates.

Fergus
September 19, 2024

Did I miss Susan writing about DEMAND SIDE factors such as:
- Govt handouts (give people money they did not have brings forward demand for housing)
- Tax policy (neg hearing / 50% CGT discount - make borrowing more subsidised by tax payers encourages more borrowing and hence prices going up....allow sitting on one's behind and reaping tax advantaged capital gains is also a demand factor)
- record immigration (people need a home hence applying pressure to the rental and home purchase market)
- Credit policy (give all borrowers more and prices will go up)
- interest rate policy (low cost of money encourages higher borrowings...see above point)
YES SUPPLY SIDE issues are part of the problem....but Susan who comes from the PROPERTY INDUSTRY in reality is not interested in increasing SUPPLY to a level that homes become AFFORDABLE as this means property prices falling. There will be no solution to the housing crisis due to the long list of conflicts of interest that various parties have - in the property sector.

Tony Murray
September 19, 2024

We all know that having people happy in their environment and contributing to society will lead to a stable society and this is at risk with the housing problem.
Travelling around Oz, it is clear that people go where there are jobs and services available. So the major centres get bigger and the smaller ones are dying. Most young families have this desire for land/house so it seems to me that urban sprawl is the inevitable outcome. Distance from centre would be more acceptable if transport was quick and efficient. Toll roads facilitated this to a point. Public transport in the form of fast trains/urban trains seems to me to be a key to solving the reluctance of people to live further out.

We live a large house with 3 empty bedrooms (empty nestors). Very concious of this in current times. There is nowhere to move to in our area at an affordable price ( it will cost more than our house is worth). NIMBYism has to be overcome to allow for duplex/townhouse development. Put parameters around it by suburb but it needs to be done.

Just thoughts toward trying to solve a very difficult but important problem. Good luck with your efforts.

Brian
September 19, 2024

Australia should incentivise regional centers that already have rail and air infrastructure that provides access to the large cities, to attract development capital by also providing electronic communication infrastructure to enable workers to work from those locations, together with better community services. Stop the drive to force WFH back to the centers of cities. WFH in distributed population centers can also mitigate security concerns in volatile geopolitical times (NOW) by diversifying our productive capacity.

John
September 19, 2024

The most important and obvious change required to fix Australia's housing affordability problem is to slash net migration to 100,000 per year or less. Excessive migration started around 2006 and has exploded since Covid restrictions were eased. We simply cannot build housing and infrastructure fast enough to keep up with excessive migration, even though we already have a large construction industry. Firstlinks should run an opposing article from Leith van Onselen to balance out this "Big Australia" propaganda.

Andrew Smith
September 20, 2024

'Excessive migration started around 2006' misdiagnosis based on false media headlines.

The NOM Net OS migration or border movements was expanded in 2006 to the 12/16+ month residency test, hence, far more international students have been included in the estimated population, and mislabelled as 'immigrants' with short term spike eg. post Covid.

Permanent migrants or traditional permanent settlers are capped at 190k p.a......majority of international students are 'net financial contributors' then they have to depart.....

The accommodatioj types and choices don't include buying houses, but staying with friends/family, homestays (using spare rooms), hostels, shares, student accommodation, rent/share apartments and some rent/share houses; on the latter the sector and media are ignorant of housing types.

John
September 20, 2024

Andrew, the ABS data clearly shows the population growth rate jumping from 2006. It doesn't matter what category migrants are in, the overall numbers have lifted whilst births minus deaths has slowed.

We've also seen house prices/rents accelerate when the population accelerates. Funny how the basic economics of demand and supply still works.

 

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Welcome to Firstlinks Edition 581 with weekend update

A recent industry event made me realise that a 30 year old investing trend could still have serious legs. Could it eventually pose a threat to two of Australia's biggest companies?

  • 10 October 2024

The quirks of retirement planning with an age gap

A big age gap can make it harder to find a solution that works for both partners – financially and otherwise. Having a frank conversation about the future, and having it as early as possible, is essential.

Welcome to Firstlinks Edition 578 with weekend update

The number of high-net-worth individuals in Australia has increased by almost 9% over the past year, and they now own $3.3 trillion in investable assets. A new report reveals how the wealthy are investing their money.

  • 19 September 2024

The everything rally brings danger and opportunity

Most market players today seek quick rewards and validation of opinion. Outsiders willing to combine new technology with old-fashioned patience and focused analysis can prosper.

The challenges of building a portfolio from scratch

It surprises me how often individual investors and even seasoned financial professionals don’t know the basics of building an investment portfolio. Here is a guide to do just that, as well as the challenges involved.

Latest Updates

Retirement

The quirks of retirement planning with an age gap

A big age gap can make it harder to find a solution that works for both partners – financially and otherwise. Having a frank conversation about the future, and having it as early as possible, is essential.

The everything rally brings danger and opportunity

Most market players today seek quick rewards and validation of opinion. Outsiders willing to combine new technology with old-fashioned patience and focused analysis can prosper.

Investment strategies

Portfolio construction in the real world

Building a portfolio is like building a house. This framework can help you move towards your goals without losing sight of reality or leaving yourself vulnerable to market storms.

Shares

Feel the fear and buy anyway

In this extract from his new book, the co-founder of Intelligent Investor reveals how investors can avoid critical mistakes and profit from opportunities in collapsing share prices.

Investment strategies

The risks of market concentration and not staying invested

MFS chief investment officer and CEO elect Ted Maloney talks market risks, similarities between Trump and Harris, and the most important thing investors can do to avoid destroying value.

Gold

Gold's important role as geopolitical tensions rise

Equity markets have traditionally struggled at times of sustained geopoltical tension. Gold, on the other hand, has thrived and can provide investors with protection against "unknown unknowns".

Strategy

The changing face of finals footy and the numbers behind it

A well-meaning AFL rule change in 2016 seems to have had unintended consequences. The top teams might cry foul but AFL bosses are unlikely to be too miffed about the outcome.

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