Monday, July 15, 2024

Category: Opinion

Australia’s Housing Crisis Has Become A Fierce Political Battle

Australia’s housing crisis has become a fierce political battle that could have major implications for the next federal election

A fierce battle over housing is set to intensify and define the next federal election as Labor, the Coalition and the Greens target a growing cohort of voters who believe they’ve been locked out of home ownership for life.

The great Australian dream of owning your own home has been fading for a long time — there’s nothing new about this. But the crisis is now baked in — and it has arguably become the big generational disrupter, changing votes and threatening to hurt the government at the next poll.

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Not Happy, Jan

The HIA believes that the consequence of these new fees will see investors withdraw from the Australian market

It looks like the industry is not swallowing the federal government’s pill that foreign investment is contributing to the housing crisis.

The Housing Industry Association (HIA) is one of many industry peak bodies and commentators to jump on the announcement made by Treasurer Jim Chalmers regarding the government’s plan to hit up foreign investors as a measure to improve housing supply for Australians.

In response to this proposed new impediment to housing investment, HIA chief economist Tim Reardon said more foreign investors would increase housing supply, not more taxes.

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Australian Housing Wealth Is Meaningless, Destructive And Fundamentally Changing Our Society

High-priced homes do not create wealth, Alan Kohler says, they redistribute it. Now financial success is largely a function of geography, not accomplishment

My parents were married in 1951 and, with a war service loan, bought a block of land in South Oakleigh, eight miles from Melbourne’s central business district.

I don’t know what my dad was making then, but he was a carpenter and apparently the average wage of a carpenter in 1951 was about 80 shillings a week, or £350 a year. And judging by average prices back then, they would have paid about £1,000 for the land. (By the way, the median house price had more than doubled in 1950, recovering from the big fall caused by price controls during the second world war, on which more later.)

Dad built the house himself, including making the bricks, working on weekends and at night, and Mum and Dad lived in a garage, to which I was brought home when I was born and where I spent the first three years of my life. But if they had bought a house and land package, which was rather more common than building it yourself, they would have paid about £1,250. So, like the median family at the time, they would have paid about 3.5 times household income (Mum didn’t work) for their first house, which was about average for the time.

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Australia Is At Social Breaking Point. Where To From Here?

It’s grim, isn’t it? This week, we’ve heard ANZ’s chief executive declare home loans are now “the preserve of the rich”, seen the Rental Affordability Index conclude that renting is less affordable than ever, and learnt that our social cohesion is at the lowest level ever measured by the Scanlon-Monash index. All are clearly related.

Home loans are so expensive because high property prices are now meeting high-interest rates. Naturally, landlords are passing this on to renters. And those interest rates are increasing because inflation is stubbornly high, meaning however unaffordable housing is, everything else is costing more, too.

The ensuing financial stress is seeping through the community and straining our social and even political relationships. That last point isn’t my speculation. It’s what the Scanlon report found. Taken altogether, this is a picture of slow-motion breakdown.

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A Four-Step Housing Solution

We have a shortage of homes in Australia. There are four steps governments can take to improve supply and ease the pressure.

After decades of debate, all political parties and agencies recognise that there is an acute shortage of housing. This is partially due to an underbuild in the previous decades, a shift toward lower density through the pandemic and strong population growth. The shortage of housing stock has reached such an acute level that all tiers of government are focused on addressing the problem.

When the National Housing Finance and Investment Corporation (NHFIC) released its State of the Nation’s Housing Report 2022-23 in April, it was a significant moment for policymakers. The report’s findings indicate that all levels of government have failed to deliver an adequate supply of homes for Australians. Until then, they failed to recognise the depth of the problem.

The Australian Government’s goal to build one million homes over the next five years is achievable, but even this volume of new homes won’t resolve the shortage. The challenge for them is how to achieve this laudable goal. The following are four necessary steps to increase the supply of new homes.

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

Converting Offices to Apartments: Theory vs. Reality

Converting Office Buildings into Apartments: A Solution to Australia’s Housing Crisis?

Australia is currently facing a housing crisis, with skyrocketing prices and a shortage of affordable housing. At the same time, the pandemic has caused a shift in the workplace, leaving many office buildings in major cities underused. As a result, the idea of converting these offices into apartments has been floated as a potential solution. While this is not a new idea, it has been done before in Australia, and it is a hot topic of discussion at the World Economic Forum.

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Young Aussie Calls Out Major Housing Myth Spread By Baby Boomers

A young influencer is challenging baby boomers who suggest ‘lazy young people sipping lattes’ could buy a house like they did 40 years ago.

Jack Toohey has made A video breaking down the differences between buying a home in 1983 and 2023.

Baby boomers are often fond of reminding the young how they paid 18 per cent interest rates in the 1980s, but they fail to mention that typical house price compared with average incomes were significantly cheaper when they bought four decades ago.

Toohey has demolished their misleading claims and misinformation with facts and figures comparing real estate values and earnings.

Homelessness Is An Entirely Solvable Problem, Just Ask Finland

Homelessness is a very simple problem that is often over-analyzed. The fact is that there is a group of people who have found themselves (for whatever reason) unable to secure a roof over their heads. Usually, they simply don’t have enough money, because rent is very high and wages are very low, meaning that even if you work full-time it’s extremely hard to afford a small apartment in many cities.

But it’s perfectly possible to simply provide a guaranteed right to housing. This is the approach Finland has taken.

They’re eradicating homelessness through the novel solution of providing housing for people. They took action, and as a result they went from having a substantial homeless population to the point where, by 2020, “practically no-one was sleeping rough on a given night in Finland.”

Read the full article in Current Affairs