Wednesday, April 24, 2024

Month: July 2023

Political Wrangling Over Housing, Rent Freezes Risks Dire Consequences

A political stand-off over rent freezes and the Federal Government’s housing fund could have huge consequences for a generation of renters and property investors.

The most talked about aspect of the current housing crisis throughout Australia is its impact on the rental market.

The pandemic created approximately 120,000 extra households in Australia, where children left home to migrate to areas of employment, downsizers separated from their family group and migrated to various parts of Australia and, sadly, increases in divorce and the like very quickly created a significant need for additional households.

On top of that, many regions that were the recipients of large interstate migration saw those migrators first needing a rental property as they considered their purchase options.

Coinciding with the increased demand for rentals, there was a reasonably large pool of investors contacted by real estate agents submitting huge offers sight unseen by owner occupiers looking to purchase properties. Many who had previously no thoughts of selling, couldn’t resist taking those sale prices.

Michael Pascoe: “I’ve Found the Missing Housing – Half a Century’s Worth”

You know all the handwringing about the housing crisis, the claims that “it’s complicated” and that “there’s no silver bullet” and the broad resignation of not having a solution?

Well, I’ve found the missing housing and know what the real solution is – if any government cares.

We’ve arrived at the present housing disaster rather like the Hemingway character explaining how he went bankrupt: “Two ways. Gradually and then suddenly.”

The “gradual” part of the crisis started half a century ago when governments began to withdraw from providing public housing.

That gradual withdrawal turned into a speedy exit since the turn of the century, finally disastrously exploding under the cover of COVID as the nation found itself with a critical shortage of accommodation and an unsustainable model of housing prices forever dramatically rising.

Read the original article at TND

Aussie House Prices Shift Onto Slow Track

It is commonly stated that it takes seven to ten years for property values to double.

However, according to analysis from PropTrack, the typical Australia took 15.4 years to double in value through May 2023.

PropTrack director economic research Cameron Kusher also noted that macroprudential regulations such as serviceability buffers have also reduced access to finance in recent years while keeping price growth in check.

“Rising interest rates and much higher prices, along with other economic and demographic factors, will weigh on the prospects of prices
doubling in the future”.

Kusher is right: Australian home values should rise at a much slower rate over the coming decade and beyond.