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

[Gralin]

Roll back Howards changes to negative gearing and cgt

Buy and build public housing

Cap rents

 

[HirdsTheWord]

Roll back Howards changes to negative gearing and cgt

Buy and build public housing

Cap rents

Yes, but the problem is convincing the voting majority to essentially agree to make their net worth lower. That is the elephant in the room with any housing policy changes.

Labor ran with changes to housing taxes etc and got smoked in the election, its no mystery why they than removed these changes and than Albo was elected the following election.

Housing as an investment is now a cultural thing in Australia. It is a very hard thing to unwind how people now view housing.

 

[Billy ray]

Yes, but the problem is convincing the voting majority to essentially agree to make their net worth lower. That is the elephant in the room with any housing policy changes.

Labor ran with changes to housing taxes etc and got smoked in the election, its no mystery why they than removed these changes and than Albo was elected the following election.

Housing as an investment is now a cultural thing in Australia. It is a very hard thing to unwind how people now view housing.

Drop the 50% discount to 10% with 4% decrements every year for 10 years

 

[Scotland]

People still at it blaming something John Howard did 25 years ago. Was it a factor in prices going up? Yes. Was it the only factor? No. Should we just roll it back? Shit no.

CGT is a deterrent to turnover. It's a transaction cost. I buy for $100k, I wait 364 days and sell for $200k, I pay tax on $100k. Or I wait another day and pay tax on $50k. OK so remove the concession and now I think 'You know what I am going to pay tax on 100% of the profit, maybe I won't buy'. There is some validity to that. But it's only one side of the equation.

But... if I bought in 2001, or 2002 or any other year after the evil CGT concession came in and you then take it away - why would I sell? The asset value has already inflated. I'm not losing anything just by keeping it longer. If it's worth $200k today and I would pay tax on $100k, why not wait until it's worth $400k and then pay tax on $300k? More tax but still more profit in my pocket. It is not a good outcome to have turnover of housing in this country reduce even more. If I sold my actual house tomorrow and bought another equivalent it would cost me somewhere in the range of $50k-$100k in changeover costs (including agent fees which are a rort anyway). That is more than a yearly median wage after tax which is absurd. CGT concession or otherwise, no one is going to try and flip a house for a quick profit with that hanging over their head.

Negative gearing should be reformed, but again you have to be careful what you wish for. We have a market where 50 people will show up to a listing for a bog ordinary 3x1 for $700 a week. The idea that you if you just make owning investment properties more expensive people will stop doing it is so naive. So long as you have 50 people turning up to see the property you haven't painted since 1985 you have costs you can pass on. The market needs time to correct, which means it needs sensible interest rates and sensible immigration rates.

 

[Gralin]

Yes, but the problem is convincing the voting majority to essentially agree to make their net worth lower. That is the elephant in the room with any housing policy changes.

Funnily enough politicians make changes to legislation all the time without taking it to a vote

Regardless it's not going to happen because of their own personal vested interests and that of their donors regardless of wider sentiment

Labor ran with changes to housing taxes etc and got smoked in the election, its no mystery why they than removed these changes and than Albo was elected the following election.

Housing as an investment is now a cultural thing in Australia. It is a very hard thing to unwind how people now view housing.

Lot's of absolutely dogshit things have been considered normal over human history and have been moved on from as society changed

The pool of people who actually benefit from this is already in the minority and the pool ot people with legitimate aspirational access to it is shrinking

On current trends we will reach the point where it's openly the wealthy minority benefiting at the expense of the rest of us

But even then I don't expect change would come without violence

 

[FreoRicci]

Change the incentives for owning multiple properties.

Increase property tax.

Cap rental prices. If median rental prices are high, government to fit the remaining or have loan systems in place.

Unlock land. Local government need to GTFO and state/federal government need to unlock rules in place preventing housing to be built.

 

[Freomaniac]

Building houses themselves isn't the issue.

Houses are cheap to build.

The problem is the infrastructure. Roads, Transport, Schools & Utilities etc that need to be built along with the houses to make the communities attractive to people. Thats the expensive part.

People need Jobs, the jobs are in cities. People dont want to move where they are commuting 1hr + to work each way because of our shitty transport systems compared to other countries.

I had to read your post twice to fully understand it.

I agree that Building houses alone isn't the issue. Certain Cities or towns or suburbs are defined with certain buildings or tourist attractions.

I might go off topic here...


I am gonna bring up an example....

Alice Springs on the Northern Territory. There is 25,000 people that live there. There are the basics such as schools and shops and petrol stations. The major issue is there is no Hospitals.

In Darwin, there is 150,000 that live there. Darwin isn't a big city. But you got the basics of schools, houses shops like Coles or Woolworths. You also have a hospital or 2.

I live in South Australia. Like all states, South Australia has the main supermarket food stores such as Coles , Woolworths and IGA (Independent Groceries Australia).

I live in South Australia. They also as Foodland, which is the South Australian version of IGA.

People in my age, which is the 20 to 40 year old demographic enjoy the night life. So Friday nights in Melbourne, Sydney, Brisbane and Adelaide is good.

We could go the full Singapore route and build 4 or 5 storey buildings near train stations.

I remember Redfern in Southern NSW had those 10 story housing trust apartments.

Extending the rail lines in certain suburbs is one good idea.

I think of the Gawler line in SA. The major train station stops are Mawson lakes, Salisbury and Elizabeth.

It ends at Gawler. After that it's all empty dirt where train lines can be extended to make more buildings and homes

 

[HirdsTheWord]

Funnily enough politicians make changes to legislation all the time without taking it to a vote

Regardless it's not going to happen because of their own personal vested interests and that of their donors regardless of wider sentiment

Lot's of absolutely dogshit things have been considered normal over human history and have been moved on from as society changed

The pool of people who actually benefit from this is already in the minority and the pool ot people with legitimate aspirational access to it is shrinking

On current trends we will reach the point where it's openly the wealthy minority benefiting at the expense of the rest of us

But even then I don't expect change would come without violence

I mean yeah, but if you change something that hits peoples pockets (even if its just perception) as much as housing policies would, they will simply turn to the other party who will do doubt say they will reverse it.

Don't really disagree with you, just saying what the reality is.

Housing in this country is culturally seen as investment first, housing second. It will take a long time to reverse that thinking of the voting base.

 

[Gralin]

I mean yeah, but if you change something that hits peoples pockets (even if its just perception) as much as housing policies would, they will simply turn to the other party who will do doubt say they will reverse it.

Don't really disagree with you, just saying what the reality is.

Housing in this country is culturally seen as investment first, housing second. It will take a long time to reverse that thinking of the voting base.

like i said

housing isn't seen as affordable by over half the population currently, let alone an investment option

yes people vote against their own self interests all the time

any whiff of doing this and the media and opposition will be out in force crying theft and destruction

like I said


its never going to happen

but you can point to the spot on the graph where this all started

Howard's changes and states stopping investing in public housing

all at the same time

everyone knows what would fix this, there is no appetite for it from too many though

 

[HirdsTheWord]

I had to read your post twice to fully understand it.

I agree that Building houses alone isn't the issue. Certain Cities or towns or suburbs are defined with certain buildings or tourist attractions.

I might go off topic here...


I am gonna bring up an example....

Alice Springs on the Northern Territory. There is 25,000 people that live there. There are the basics such as schools and shops and petrol stations. The major issue is there is no Hospitals.

In Darwin, there is 150,000 that live there. Darwin isn't a big city. But you got the basics of schools, houses shops like Coles or Woolworths. You also have a hospital or 2.

I live in South Australia. Like all states, South Australia has the main supermarket food stores such as Coles , Woolworths and IGA (Independent Groceries Australia).

I live in South Australia. They also as Foodland, which is the South Australian version of IGA.

People in my age, which is the 20 to 40 year old demographic enjoy the night life. So Friday nights in Melbourne, Sydney, Brisbane and Adelaide is good.

We could go the full Singapore route and build 4 or 5 storey buildings near train stations.

I remember Redfern in Southern NSW had those 10 story housing trust apartments.

Extending the rail lines in certain suburbs is one good idea.

I think of the Gawler line in SA. The major train station stops are Mawson lakes, Salisbury and Elizabeth.

It ends at Gawler. After that it's all empty dirt where train lines can be extended to make more buildings and homes

They are trying to do this is NSW, but they are facing massive backlash from councils ( basically residents) who dont want it.

We can come up with all the ideas in the world on how to fix housing, some are actually very simple. The problem is we live in a country where people need to be voted in by the majority, whether that's government or council doesn't matter.

Housing is a battle of the haves and the have not's. The problem is the majority of the voting base own houses. So unless both major parties run with the same housing policy, people are always going to vote for the one that doesn't impact their financial position.

 

[HirdsTheWord]

like i said

housing isn't seen as affordable by over half the population currently, let alone an investment option

yes people vote against their own self interests all the time

any whiff of doing this and the media and opposition will be out in force crying theft and destruction

like I said


its never going to happen

but you can point to the spot on the graph where this all started

Howard's changes and states stopping investing in public housing

all at the same time

everyone knows what would fix this, there is no appetite for it from too many though

Agreed

It started with Howard, got out of control and now its a machine too hard to stop.

I'm generally on the side of making housing affordable, I don't need my house to gain 10% every year, but ill admit I also check domain every 2 months or so to see what my place is worth!

I feel very sorry for people who are yet to get on the ladder. It must absolutely suck.

 

[Johnny Bananas]

But, but, it's all the fault of immigration!

 

[leon123]

Roll back Howards changes to negative gearing and cgt

Buy and build public housing

Cap rents

Capping rents is very silly.

Increased social housing is a solid option, not only increases affordable stock, has the impact of decreasing private sector rentals

 

[leon123]

Change the incentives for owning multiple properties.

Increase property tax.

Cap rental prices. If median rental prices are high, government to fit the remaining or have loan systems in place.

Unlock land. Local government need to GTFO and state/federal government need to unlock rules in place preventing housing to be built.

Unlocking land is sensible, but we are only talking about the established urban area.. ie redevlopment... this is sensible.

The other suggestions will simplybdecrease supply... thats not good

 

[Gralin]

Capping rents is very silly.

Increased social housing is a solid option, not only increases affordable stock, has the impact of decreasing private sector rentals

Actually capping rents is good

Social housing is shit

I said public gor a reason

 

[leon123]

Actually capping rents is good

Social housing is shit

I said public gor a reason

Social housing has its issues, id prefer public, but issue with both sectors can be resolved.

Capping rents in my view is moronic... can you expllain how capping rents would work.. if this was policy, we would be paying 2 shillings per week. How is it practically undertaken.

If rents are capped... in a very short time, private sector rental would not exist

 

[Gralin]

Social housing has its issues, id prefer public, but issue with both sectors can be resolved.

Social housing shouldn't even be in the discussion

I want public housing as government policy not social or "affordable" or any other bullshit they come up with to subsidize profits for their mates with tax payer money and land

Capping rents in my view is moronic... can you expllain how capping rents would work.. if this was policy, we would be paying 2 shillings per week. How is it practically undertaken.

If rents are capped... in a very short time, private sector rental would not exist

Oh no private sector doesn't exist if price gouging not allowed

What a shame

Rent control exists in many cities around the world and is a good thing

 

[leon123]

Social housing shouldn't even be in the discussion

I want public housing as government policy not social or "affordable" or any other bullshit they come up with to subsidize profits for their mates with tax payer money and land

Oh no private sector doesn't exist if price gouging not allowed

What a shame

Rent control exists in many cities around the world and is a good thing

Social housing in many instances provide great outcomes, public housing can provide very poor...both have issues. Social housing is in the mix.

Rental controls do exist, not in many cities, but do exist.

Rental capping as you noted will simply decrease supply, which is bad for lower income rental households.

Can you explain how private rental would work if capped finacially, ie the bais of provision.

I will state strongly, provision of social (public and community) is the core answer to our housing affordability challenges

 

[Gralin]

Social housing in many instances provide great outcomes, public housing can provide very poor...both have issues. Social housing is in the mix.

Man I am so sick of any time public housing is brought up the conversation is moved to social housing

If i had meant social housing i would have said social housing

Rental controls do exist, not in many cities, but do exist.

Yes and work

Rental capping as you noted will simply decrease supply, which is bad for lower income rental households.

Lol the low income households already can't afford the rent

Can you explain how private rental would work if capped finacially, ie the bais of provision.

Heaven forbid pricing is regulated instead of left to real estate agents to keep pushing up all the time

I will state strongly, provision of social (public and community) is the core answer to our housing affordability challenges

Not by itself

 

[leon123]

Man I am so sick of any time public housing is brought up the conversation is moved to social housing

If i had meant social housing i would have said social housing

Yes and work

Lol the low income households already can't afford the rent

Heaven forbid pricing is regulated instead of left to real estate agents to keep pushing up all the time

Not by itself

Ill listen... whats your main issues with community housing...

There are many issues with public housing... but can be reformed

 

[Johnny Bananas]

Social housing has its issues, id prefer public, but issue with both sectors can be resolved.

Capping rents in my view is moronic... can you expllain how capping rents would work.. if this was policy, we would be paying 2 shillings per week. How is it practically undertaken.

If rents are capped... in a very short time, private sector rental would not exist

Capping rents work as a short term measure to stem rental growth. I agree with you that if most rentals remain private, in the long term landlords would either not rent out properties, or find some way to decrease the quality of the dwelling to ensure they still make money.

The point of a short term measure is it buys time for governments to build more public housing (or social housing which is worse because it takes a greater percentage of people's incomes and allows religious nutters to impose their morals on tenants). People are becoming homeless right now. They need help right now, not in 5 years' time when governments finally decide to start building public housing, or enough social housing gets built to make any dent in the affordability problem (and I have doubts about that ever happening).

Combining rent caps with the construction of public or social housing is a holistic solution. One of them alone is either unsustainable or does nothing to prevent people currently on the edge from becoming homeless.

Note the ACT already has rent caps. The rent on a property cannot increase by more than 10% in a year there. I haven't heard of their rental market collapsing as a result.

 

[leon123]

Capping rents work as a short term measure to stem rental growth. I agree with you that if most rentals remain private, in the long term landlords would either not rent out properties, or find some way to decrease the quality of the dwelling to ensure they still make money.

The point of a short term measure is it buys time for governments to build more public housing (or social housing which is worse because it takes a greater percentage of people's incomes and allows religious nutters to impose their morals on tenants). People are becoming homeless right now. They need help right now, not in 5 years' time when governments finally decide to start building public housing, or enough social housing gets built to make any dent in the affordability problem (and I have doubts about that ever happening).

Combining rent caps with the construction of public or social housing is a holistic solution. One of them alone is either unsustainable or does nothing to prevent people currently on the edge from becoming homeless.

I largely agree with what you have outlined.

My biggest issue with community housing is that, as you have identified the potential (and real) discrimination of tenants ie religious nutters.

 

[King Patty]

More people.
less houses listed for sale.
supply / demand

 

[HirdsTheWord]

Capping rents work as a short term measure to stem rental growth. I agree with you that if most rentals remain private, in the long term landlords would either not rent out properties, or find some way to decrease the quality of the dwelling to ensure they still make money.

The point of a short term measure is it buys time for governments to build more public housing (or social housing which is worse because it takes a greater percentage of people's incomes and allows religious nutters to impose their morals on tenants). People are becoming homeless right now. They need help right now, not in 5 years' time when governments finally decide to start building public housing, or enough social housing gets built to make any dent in the affordability problem (and I have doubts about that ever happening).

Combining rent caps with the construction of public or social housing is a holistic solution. One of them alone is either unsustainable or does nothing to prevent people currently on the edge from becoming homeless.

Note the ACT already has rent caps. The rent on a property cannot increase by more than 10% in a year there. I haven't heard of their rental market collapsing as a result.

Agree. I don't think capping rents in isolation is a good idea, you can't cap rents, without capping interest rates. Landlords will just stop maintaining properties.

I think we are better off tackling the route cause problem to limit investing in housing in the first place. Yes we need the free market to also play its part via private investment but ideally we want more owner occupiers, not renters.

There is a balance there for sure. I think that balance is just too far swung to investment at the moment.

 

[Scotland]

Interest rates impact the whole economy and are not the source of the housing crisis anyway.

Landlords increase rents and blame it on rising interest rates because they can. What goes up doesn't necessarily come down though. The RBA cash rate target is 3.85% and home loan rates are 5-6% or so.

1% on a $500k is as good as $100 a week. You reckon if the cash rate was reduced by 1% tomorrow that rents would reduce by the equivalent interest saving across the board? Of course not. Just because a house is worth $1m and has a rental value of $1000 a week doesn't mean the person that owns it has a $1m loan, and even if they do they aren't going to lower the rent to $800 anyway. The only thing that will lead to that outcome is lower demand pressure or higher supply pressure. If you can rent out a house for $1000 you will. If you can't, then whether it costs you $100, $500 or $2000 a week to own is your problem. No one owes you an investment property. The whole flipping point of negative gearing is that you can offset your losses against personal income tax.

I rented my old house before and during covid. My interest rate was something like 3.8% at the time I moved out. All of a sudden the world was ending and that rate dropped below 2%. So in effect the amount of interest I was paying halved. And then it came time to renew the lease the first thing the agent said was "you can get $50 a week more in this market". The whole "industry" is a scam to drive prices up year on year. The more something is worth the more you can charge and the more you can borrow etc. etc.

People keep looking at the problem from the wrong angle anyway. If interest payments cost $5000 a month and you can only get $3000 a month in rent then that will discourage investing and supply will increase and prices will come down is naive nonsense. There are 28m people and... 5m? 8m? 10m? properties. It's a game of Monopoly.