Society/Culture The housing crisis. How is it fixed?

[Frank Grimes]

Melbourne’s falling house prices threaten to blow billion-dollar hole in state budget

Treasury was banking on a property price rise through 2026 to bolster Victoria’s bottom line. Market reality is now telling a different story.

www.theage.com.au

The take away from this article is:
- Melbourne's house prices are decreasing rather than the forecast of increasing.

- The government was relying on the house prices increasing for property tax revenue (the article mentions loss of projected revenue due to stamp due, but it would also apply to land tax because it's also linked to the value of the property).

Just a general observation that Melbourne house prices have remained stagnant over the years and now even falling. While all the other cities have had sky rocketing house prices.

Despite being the second largest city with the third highest median income, I vaguely remember reading somewhere that Melbourne now has the 6th highest house prices for a state capital (Even Adelaide and Brisbane is more expensive). The only capitals which have lower house prices are Darwin and Hobart.

 

[peetoo]

Melbourne’s falling house prices threaten to blow billion-dollar hole in state budget

Treasury was banking on a property price rise through 2026 to bolster Victoria’s bottom line. Market reality is now telling a different story.

www.theage.com.au

The take away from this article is:
- Melbourne's house prices are decreasing rather than the forecast of increasing.

- The government was relying on the house prices increasing for property tax revenue (the article mentions loss of projected revenue due to stamp due, but it would also apply to land tax because it's also linked to the value of the property).

Just a general observation that Melbourne house prices have remained stagnant over the years and now even falling. While all the other cities have had sky rocketing house prices.

Despite being the second largest city with the third highest median income, I vaguely remember reading somewhere that Melbourne now has the 6th highest house prices for a state capital (Even Adelaide and Brisbane is more expensive). The only capitals which have lower house prices are Darwin and Hobart.

Our house is 10x over 30 years but this is good news for my kids. 10x is enough for this boomer.

Is it the very clumsy airbnb tax by the state govt which helped to do this?

 

[Gralin]

Melbourne’s falling house prices threaten to blow billion-dollar hole in state budget

Treasury was banking on a property price rise through 2026 to bolster Victoria’s bottom line. Market reality is now telling a different story.

www.theage.com.au

The take away from this article is:
- Melbourne's house prices are decreasing rather than the forecast of increasing.

- The government was relying on the house prices increasing for property tax revenue (the article mentions loss of projected revenue due to stamp due, but it would also apply to land tax because it's also linked to the value of the property).

Just a general observation that Melbourne house prices have remained stagnant over the years and now even falling. While all the other cities have had sky rocketing house prices.

Despite being the second largest city with the third highest median income, I vaguely remember reading somewhere that Melbourne now has the 6th highest house prices for a state capital (Even Adelaide and Brisbane is more expensive). The only capitals which have lower house prices are Darwin and Hobart.

Good to see we're doing something right in Melbourne then

 

[Seeds]

Good to see we're doing something right in Melbourne then

What are the housing policies melbourne are doing right compared to other states? I dont live there anymore so not aware of state govt policies.

 

[Frank Grimes]

Our house is 10x over 30 years but this is good news for my kids. 10x is enough for this boomer.

Is it the very clumsy airbnb tax by the state govt which helped to do this?

I thinks it may be a variety of factors.

Note I'm basing the below of things I vaguely remember reading and may not be accurate:

• Melbourne has been building more houses compared to other states adding to the supply.
• Many landlords have sold off their properties due to the massive increase in land tax, vacant property tax and expenses introduced by the state government.
• There has been more Victorians leaving to live in other states than people moving to Victoria.
• People selling their holiday home due to the above mentioned increase in Land Tax.
• There is not much geographically preventing the city from sprawling compared to Sydney for example.

 

[leon123]

Apparently there’s thousands of approved projects just being sat on

100% and if we only talk about Melbourne, there is current significant zoned greenfield land stocks - supply isnt an issue in Melbs... Perth yes

 

[leon123]

What are the housing policies melbourne are doing right compared to other states? I dont live there anymore so not aware of state govt policies.

pri-active land supply strategies. the basis was formed from the planning strategy Melb2030, released in 2002

 

[Rob R]

What are the housing policies melbourne are doing right compared to other states? I dont live there anymore so not aware of state govt policies.

It probably helps keep prices down that Melbourne is an over populated, congested dump. Prices are booming in areas of the state where people who can leave Melbourne due to their work circumstances are going to

 

[Freomaniac]

It's a complex problem and Governments don't really want to do anything serious to fix it.

The federal government is too highly reliant on Income Tax revenue. When it needs more revenue (to balance the books) it increases migration to increase the number of Tax Payers. This greatly increases housing demand and prices.

To really fix the problem the Tax system needs to be reformed. There are a number of changes to existing taxes, new taxes etc that could help with this. However, these will not be popular in the short term so Governments will not implement them.

Good point

 

[Freomaniac]

We have built plenty of houses. On a per capita basis we build plenty of housing.

Land markets have been bid up spectacularly by traders/speculators. Most people rightly can't afford the crazy prices. However, this is nothing new, it follows an 18 year cycle. Phillip Anderson and Fred Harrison have published/written extensively on the topic going back years and decades.

The entire thing is going to collapse come late 2025/2026. As it did in 2007/08. 1990. 1972 and 1955.

It needn't be this way of course. But it is the way economies go when land markets are speculated on and rents are sought.

You buy the ticket, you take the ride.

Interesting pattern

 

[peetoo]

Housing didn’t collapse much around 2008-10, but it did in britain

Quite a few ex Brit’s wanting to return there found the house swap bought twice the house in Uk from a year earlier