"Make Homes Affordable Again" in Australia (and other countries)

[excreationist]

About 6 months ago I got a double-sided t-shirt printed to provoke conversations - a bit like Billboard Chris. I got it in blue to stand out more and I thought it being red (Labor) or green (the Greens) might turn some people off. But blue is the colour of the right-wing Coalition and they have some housing policies that I don't want to give the impression I support. Well I haven't worn it for many months. I had originally been thinking about going to the Brisbane CBD (where Billboard Chris got in trouble with the police). (and the state government parliament since I did this shortly before the state election).



A message I wrote on the internet:

Basically I think US house prices decreased a lot during the GFC and Australia's didn't. I think lower house prices means better affordability. I think affordability is more important than them being a good investment.

But the Australian housing minister seems to prefer housing being a secure investment rather than promoting affordability...

Economists respond to minister insisting house prices shouldn't fall

Last month, Housing Minister Clare O'Neil told triple j that the government wasn't trying to bring down house prices. The interview found a new life online this week, so we asked the experts what they think.

www.abc.net.au

Last month, Clare O'Neil told youth radio station triple j that young people might want house prices to drop but the government did not.

"We're not trying to bring down house prices," Housing Minister Clare O'Neil declared on ABC's youth radio station triple j.

"That may be the view of young people, [but] it's not the view of our government."

Instead, she insisted the federal government wanted "sustainable price growth".

Also from the link:

Economists have argued house prices should stand still, or perhaps even gradually fall

In the GFC apparently the housing price was part of a bubble. The housing minister wants there to be no bubble and just increase forever ("sustainably").

So she wants property to be a secure investment, unlike shares and owning a business.

BTW in Australia from about the 1970s to 2000 wages and house prices grew at about the same rate. Then after negative gearing and capital gains taxes were introduced, house prices increased a lot, and now house prices have doubled compared to wages. If house prices stopped increasing then there would be a chance for wages to catch up again. (though the median house price to median salary ratio has more than quadrupled)

As far as negative gearing and capital gains taxes goes, it allows rich people like surgeons and anaesthetists who earn about A$400k to reduce the taxes they pay by outbidding first home buyers and they're better off even if they make a loss (negative gearing).

So what is your opinion on housing affordability? Is it ok for prices to drop? Should they just keep on increasing? In Australia the Greens party wants the government to build affordable houses again like they did in the 1970s but property investors (like many politicians) want to get a good return on their investments i.e. become less affordable. The investors are so influential and powerful it seems houses might never become affordable again like they used to. If too many new houses are built the prices might start to drop and the housing minister never wants them to drop.

 

[Loren Pechtel]

The market reality is that far more people are "hurt" (no, the vast majority "suffer" a meaningless drop in their net worth--only those who are downsizing are actually hurt) than who are trying to enter the market. Thus no politician will be serious about doing anything to lower home prices.

However, the reality is that there's no much to be done, anyway. Housing prices are driven by land prices. Land in a location with a good commute is a limited commodity being chased by an increasing number of customers. In addition, as land goes up people what goes into the house goes up because it's a lower percentage of the total price. The percentage difference in price from adding upgrades goes down. This applies across the entire market, apartments as well as houses. High land prices drive out the low end of the market. Thus prices go even higher.

I keep hearing the peanut gallery screaming about density. Nope, the price per square foot of living space goes up as the density goes up. Not to mention that the various utilities aren't sized for that. And in the case of roads, aren't easy to expand.

I do see one change the government could make--tax office desks. If your interaction with your employer is entirely via data the government should be trying to get you out of the office.

 

[Jimmy Higgins]

The people want two things, affordable housing and housing to go up in value. These two things are not compatible.

Housing is extremely important. Housing is an issue everywhere, though a larger issue in some place relative to others. The solution? Well, destigmatizing not being wealthy would be helpful. You mention the word affordable housing development near someone's home and it is holy hell to pay! Like how halfway houses are great, in other people's neighborhoods.

I suppose we need to ask ourselves a question. Do we believe every person has a right to shelter? If the answer is yes, then we need to determine a mechanism that helps provide options. If the answer is no, people need to own it and not whine about homelessness. In places like California, they are running out of suburbs to displace further from population centers where people can afford to live. If we had more urban housing, things could be better, but unfortunately, a decision was made in the 1950s/60s by massive financial institutions to effectively abandon urban areas in lieu of the suburbs. And that worked for a while (for white people), but now that decision is giving us an ugly payoff.

 

[Jarhyn]

The only way to make this happen would be to implement measures that make rental and "investment" income or rent seeking in general onerous and counterproductive to the desire to make easy money.

I have seen such things as Land Value Tax proposed, as well as drastically increasing taxes on empty properties.

It all boils down to "don't allow people to make money this way" in the end.

However you want to do that, the people who make that money will squeal like stuck pigs whenever you try, because useless people want to remain useless.