I think for a start, there has to be some way of preventing greedy property investors (including the politicians) from hoovering up all of the supply once it's created. Otherwise there is no point increasing additional supply. I agree the migration policies are nonsensical, and the RBA have to do their thing to regulate the economy. You forgot one other variable they can control - money creation.

My question is: what was the genesis of this problem ?. I moved down to Adelaide in 1997 from Darwin. I rented a 1 bedroom flat for $75/PW. Dole was about $320/PF I think. Basically, I could exist on the dole, and look for work, and be independent with no help from Mum and Dad. This enabled me to get my roots in Adelaide with a pretty good job. I sail Semaphore, and carpark was full of interstate kids and tourists with jobs living out of their cars until the council moved them on. 1997 to 2023. What happened ?

jn1 said..
I think for a start, there has to be some way of preventing greedy property investors (including the politicians) from hoovering up all of the supply once it's created. Otherwise there is no point increasing additional supply. I agree the migration policies are nonsensical, and the RBA have to do their thing to regulate the economy. You forgot one other variable they can control - money creation.

This is the thing that bugs me big time. I have taken advantage of the property investment benefits, so I know first hand how easy it is and how much easier it is for you than the people struggling to buy their first property.

I remember outbidding everyone at an auction with the knowledge that the short term extra money I paid would get returned to me over the long term and I could get a bit of a tax-break until then.

It is terrible that this current government couldn't get into power in the previous election because they campaigned to change this. Now they are in, they really can't change it. It needs to be changed, but there are so many people making a bundle from doing it and they vote too.

Yes, the pollies, in all parties, were shown to have a lot of investment properties, so there is going to be minimal pressure from them.

As for the RBA creating money, if they create too much, inflation goes up more. If they create too little interest rates go up due to the (short) supply of money.

It really is a structural problem and it beats me how the government are going to handle it. More immigration is a way to bump up the GDP but it pushes up housing prices and screws lots of people.

Insurance company profits increased 42 percent last year.oil companies also had massive profits.i don't call it inflation, I call it greed.

jn1 said..
My question is: what was the genesis of this problem ?. I moved down to Adelaide in 1997 from Darwin. I rented a 1 bedroom flat for $75/PW. Dole was about $320/PF I think. Basically, I could exist on the dole, and look for work, and be independent with no help from Mum and Dad. This enabled me to get my roots in Adelaide with a pretty good job. I sail Semaphore, and carpark was full of interstate kids and tourists with jobs living out of their cars until the council moved them on. 1997 to 2023. What happened ?

I've been wondering the same about housing problem. Why didn't we have a housing problem in 2020.

The pandemic changed how people worked and lived. I read, somewhere, some statistics on the number of people per household changed. The average number of people per household dropped after the pandemic, which in part caused the housing problem. Other contributing factors were the supply issues and problems associated with building industry.

FormulaNova said..

jn1 said..
I think for a start, there has to be some way of preventing greedy property investors (including the politicians) from hoovering up all of the supply once it's created. Otherwise there is no point increasing additional supply. I agree the migration policies are nonsensical, and the RBA have to do their thing to regulate the economy. You forgot one other variable they can control - money creation.

This is the thing that bugs me big time. I have taken advantage of the property investment benefits, so I know first hand how easy it is and how much easier it is for you than the people struggling to buy their first property.

I remember outbidding everyone at an auction with the knowledge that the short term extra money I paid would get returned to me over the long term and I could get a bit of a tax-break until then.

It is terrible that this current government couldn't get into power in the previous election because they campaigned to change this. Now they are in, they really can't change it. It needs to be changed, but there are so many people making a bundle from doing it and they vote too.

Yes, the pollies, in all parties, were shown to have a lot of investment properties, so there is going to be minimal pressure from them.

As for the RBA creating money, if they create too much, inflation goes up more. If they create too little interest rates go up due to the (short) supply of money.

It really is a structural problem and it beats me how the government are going to handle it. More immigration is a way to bump up the GDP but it pushes up housing prices and screws lots of people.

If you want a new house you go to a builder and order one, greedy investors buying all the available properties is a load of rubbish, if a short supply of new builds exists it due to local and state government regulations and not releasing enough land.

A big part of the problem in Perth is that the state housing houses get regularly trashed but the tradies who would ordinarily fix them are flat out earning bigger coin on the backlog of new builds.
I had heard that Dale Alcock, one of Perth's biggest builders, had snapped up all the large parcels of available land a few years ago and has been sitting on it, forcing a supply/demand issue to his advantage. Could this be the outcome?

cammd said..

If you want a new house you go to a builder and order one, greedy investors buying all the available properties is a load of rubbish, if a short supply of new builds exists it due to local and state government regulations and not releasing enough land.

This is based on my observations of buying and selling my houses in 2007 and 2016/17 in Adelaide. Plus talking to friends and coworkers over the years. Most people I know who were in the market 20 years ago and well off, own at least one investment property. Plus the ABC news article in 2017 about politician investment property interests, which I would bet would be statistically the same as the greater statistical population of investors (ie, if you calculated mean and SD from that news article, it would be similar to the mean and SD of the general population with similar incomes). As myscreenname said, there have been recent factors, but flipping houses was an obsession in Adelaide before 2020.

FormulaNova said..

Buster fin said..
...
I had heard that Dale Alcock, one of Perth's biggest builders, had snapped up all the large parcels of available land a few years ago and has been sitting on it, forcing a supply/demand issue to his advantage. Could this be the outcome?

It would have cost them a fortune if this were the case, and what if people stopped buying houses? They would go bust.

When I drive past new housing developments there always seem to be blocks available and I very much doubt that all the houses are being built by one builder.

Investors want to buy existing stock unless it is a development where they can get 2 or 3 dwellings on the same block. Most seem to be in it for capital gain, not rental returns, so its not like they jump in when rents are high but interest rates are heading up.

Didn't BGC recently stop taking on new builds?

They've got a backlog of 19,000 homes to build that people have signed contracts for and probably poured slabs for.

UncleBob said..

TonyAbbott said..
Inflation is caused by excessive government spending/printing money

Everything the government is doing is making it worse.

And of course the government that you at one time presided over (if you really are the mad monk) and subsequently set to work to demolish, did everything differently and for the better?? Get a hold of yourself, (not in that manner) and accept that the general populace have seen through you and your compatriots self centered and selfish practices and moved on.

Better economicly than the rudd/gillard/Rudd, scomo, turdbull, Albanese governments

Not better than the Howard government.

I'm sorry I hurt your feelings so much

Have you sought therapy?

Life is easy when one is a Rhode Scholar

japie said..
You just know that when you compare the Australian paradigm with what has been achieved elsewhere around the world that our illustrious leaders do not hold their electorates best interests at heart:

I wonder if that would work in Australia?

My experience of schooling was at a high school in a bit of a rough area. I can imagine that same mindset of the locals where I went to school turning these sort of housing developments into ghettos. How do you stop that?

People would be throwing things from the top floors onto the lower apartments. The pool would be dominated by thugs and you wouldn't be safe anywhere.

On the opposite side of the coin I went and did some work in a/the housing commission building in North Sydney years ago. It is a dominant feature of the landscape as it has been built as high-rise in the middle of normal residential, yet the place seemed quiet. I think the difference was that it was full of old people and they seemed to have some feeling of ownership.

Yet a housing commission block of flats near where my parents live became a bit of a den of drug dealers and thieves.

It's not an easy answer so I can understand why housing commissons seem to be 'installing' people amongst neighbourhoods instead of building bigger developements. Maybe they need to build developments and open the majority of it up to private renters and only retain 1 or 2 for public housing spots? That way they can get the development that is needed but avoid ghettos?

It sounds like the place I mentioned has had its issues too. How do you get people that universally respect where they are living and their neighbours? I can't find that in normal surburbia let alone expecting it in a housing commission place.

epress.lib.uts.edu.au/journals/index.php/cjlg/article/view/5488/5909

I haven't really thought through the details, but what if, one adult person can only buy one house (or unit), one couple = 1 PPOR and 1 investment property.
Negative gearing seems to favour the rich, getting rid of NG would surely reduce house prices, but would it increase rent for the remaining investment properties?

japie said..

myscreenname said..

jn1 said..
My question is: what was the genesis of this problem ?. I moved down to Adelaide in 1997 from Darwin. I rented a 1 bedroom flat for $75/PW. Dole was about $320/PF I think. Basically, I could exist on the dole, and look for work, and be independent with no help from Mum and Dad. This enabled me to get my roots in Adelaide with a pretty good job. I sail Semaphore, and carpark was full of interstate kids and tourists with jobs living out of their cars until the council moved them on. 1997 to 2023. What happened ?

I've been wondering the same about housing problem. Why didn't we have a housing problem in 2020.

The pandemic changed how people worked and lived. I read, somewhere, some statistics on the number of people per household changed. The average number of people per household dropped after the pandemic, which in part caused the housing problem. Other contributing factors were the supply issues and problems associated with building industry.

You just know that when you compare the Australian paradigm with what has been achieved elsewhere around the world that our illustrious leaders do not hold their electorates best interests at heart:

But why now ?. Why didn't to happen in 1990 or before ? (I have Adelaide in mind when I ask this question).

jn1 said..
I've been wondering the same about housing problem. Why didn't we have a housing problem in 2020.

The pandemic changed how people worked and lived. I read, somewhere, some statistics on the number of people per household changed. The average number of people per household dropped after the pandemic, which in part caused the housing problem. Other contributing factors were the supply issues and problems associated with building industry.

You just know that when you compare the Australian paradigm with what has been achieved elsewhere around the world that our illustrious leaders do not hold their electorates best interests at heart:

But why now ?. Why didn't to happen in 1990 or before ? (I have Adelaide in mind when I ask this question).

My personal belief is that it was the change in the capital gains discount and interest rates were low. I started looking for a house in 2000 just based on my income and stage of life at the time. I bought in 2001 and even at that point it was easy to find houses that were affordable and there were plenty on the market (in Sydney) that were reasonable. You had plenty of time to drive around and look at the places and auctions weren't that common as they became later.

I had to jump through hoops to get a loan from a bank as I was self employed and had to put together lots of documentation and show regular savings and PAYG income in order to get approved.

A few years later banks were doing what I called 'drug dealer loans', i.e. low-doc loans. Things were booming as people started competing for houses and there seemed to be a boom in home renovation and home buying programs. What were the names of those programs again, the one's where people were competing to buy at auctions?

In 2007 interest rates had crept up to 8% and things were slowing a bit. Then the GFC hit and interest rates went down and things started to boom again.

I had colleagues that had many investment properties. They were using their income to get a hefty tax discount and using the equity to buy more. One guy told me he had 12. I saw no difficulty in his lifestyle so servicing the loans didn't seem to be a problem for him.

Rails said..

TonyAbbott said..
Life is easy when one is a Rhode Scholar

Rhodes

That's the vaccines fault

Poor spelling is another symptom