Changing how a society thinks about housing won’t be easy and we do have to start somewhere. But based on what’s on offer during this election campaign, it’s not going to happen any time soon.
Spot on analysis. Negative gearing and capital gains concessions do need to go to remove one of the barriers to more widespread home ownership. There are at least two other neoliberal objectives that should be addressed.
Firstly, the structural shift to part time work/holding down 2-3 jobs, contracting in the gig economy. I was studying for an MBA in 2000 and already the proposition was being taught/learned that temporary work is the way of the future. Half the class disagreed - yet here we are.
Secondly, along with the changed nature of employment came the depression of wage increases in line with CPI (at least), while corporate profits increased (generally, ok my super is doing well) and ludicrous rise of executive remuneration. So it is that many more times annual income to buy a house now then 30-50 years ago.
There may be a third area that I mention from experience. It has to do with land planning and how the developers develop the land and release it for sale. Two of many points:
Better regulation of land planning and development. I helped my son buy a 300m2 block of land in north west Sydney back in 2020. From memory and by way of example the price of the always limited releases of about 20 blocks each time were: mid 2019 ~$320k (when we started looking ); late 2019 ~$360k; early 2020 ~$430k; late 2020 $460k - when we bought. As my second son wanted to buy we started looking in late 2021 ~$580k; late 2022 $650k - when we gave up. Blocks of land of 240m2 in that area are now going for $750 to $850k. I have not heard one valid explanation of this rate of increase. Demand in some way is obviously one, but so too is greed.
Complete development of a block. Developers nowadays seem to do the basics level block, retaining wall, drainage and then roads etc. However my sons block cost another $100k to put in more drainage, level it to a building standard, added to the retaining wall and other bits and pieces that should ideally be done by the developer. So The $100k would generally be unbudgeted for a new home buyer and it gets added to the price of the house later when it is sold.
Spot on analysis. Negative gearing and capital gains concessions do need to go to remove one of the barriers to more widespread home ownership. There are at least two other neoliberal objectives that should be addressed.
Firstly, the structural shift to part time work/holding down 2-3 jobs, contracting in the gig economy. I was studying for an MBA in 2000 and already the proposition was being taught/learned that temporary work is the way of the future. Half the class disagreed - yet here we are.
Secondly, along with the changed nature of employment came the depression of wage increases in line with CPI (at least), while corporate profits increased (generally, ok my super is doing well) and ludicrous rise of executive remuneration. So it is that many more times annual income to buy a house now then 30-50 years ago.
There may be a third area that I mention from experience. It has to do with land planning and how the developers develop the land and release it for sale. Two of many points:
Better regulation of land planning and development. I helped my son buy a 300m2 block of land in north west Sydney back in 2020. From memory and by way of example the price of the always limited releases of about 20 blocks each time were: mid 2019 ~$320k (when we started looking ); late 2019 ~$360k; early 2020 ~$430k; late 2020 $460k - when we bought. As my second son wanted to buy we started looking in late 2021 ~$580k; late 2022 $650k - when we gave up. Blocks of land of 240m2 in that area are now going for $750 to $850k. I have not heard one valid explanation of this rate of increase. Demand in some way is obviously one, but so too is greed.
Complete development of a block. Developers nowadays seem to do the basics level block, retaining wall, drainage and then roads etc. However my sons block cost another $100k to put in more drainage, level it to a building standard, added to the retaining wall and other bits and pieces that should ideally be done by the developer. So The $100k would generally be unbudgeted for a new home buyer and it gets added to the price of the house later when it is sold.
Superb piece. Now all we need is for politicians to gain some courage and conviction to do what must be done.
I read we need to build about 250,000 homes annually, but are only building about 140,000, so lack of supply is am issue.
There is also a shortage of trades, partly because the Morrison government squeezed TAFE funding and not enough were trained.
Another issue isvchanging demand. More people, particularly singles, want apartments and town houses, but we still focus on detached houses.
Our first place was a small shack and our second a villa, as we saved for a small house.
The deposit is a problem, which Albanese's 5% deposit scheme might help.
Dutton's tax deduction won't help to save a deposit.
Also need a lot more public housing for long-term rental, which Albanese's Build to Rent scheme might help.
It will take a decade to improve this housing situation.