In the 1960s the Housing Commission built tens of thousands of homes.
Who can forget Green Valley, Dundas Valley and Ermington, in Sydney alone?
Housing was not considered an investment; it was for families to live in.
Sure, the values rose but as a consequence of living in the house for decades.
We now have short-term rentals at exorbitant rents pricing the needy out of the market.
We have a greedy State Government with a vested interest in high-value property sales because they reap the stamp duty on each sale.
We have a Federal Government not willing to remove the negative gearing and tax benefits afforded to property investors.
We have greedy investors outbidding homebuyers trying to get into the market just to live.
We have a real estate industry that doesn’t want to stop the present state because they are making huge commissions.
We have developers pushing governments to raise dam walls so they can build on flood-prone land that they have been “sitting on” for years.
Who will pay the cost when there is no insurance and flooding occurs?
Yet more developers hold land until the value rises to maximise profits.
Local councils play a huge part (also the Land and Environment Court) in approving development on flood-prone land because they want the rates.
Perhaps my list is incomplete, but you surely get the message.
I am a property owner (only my principal residence), and I find it obscene when property is used as an alternative investment, and in so doing locking others out of a home.
I was totally disgusted at (what) occurred when Bill Shorten proposed to draw a line in the sand, so all future house investments would not get the existing negative gearing or tax benefits.
The outcry identified (who would lose out) – mainly the real estate industry.
Let us not forget the Finance Minister from the Morrison Government, who deplored the removal of negative gearing, Mathias Cormann.
When he gave his first public address on appointment to the World Financial Institution, he demanded tax reform in Australia specifically removing the “ill-advised, and over-indulgent negative gearing and tax benefits to those investing in homes”.
The most effective way to remove the property market “heat” would be to “draw the line in the sand” and remove all tax benefits for those investing in housing from now on, and possibly even gradually retrospectively after giving time to divest current dwellings to invest elsewhere.
Do the greedy ones among us even consider the fact that those persons who work in hospitals, the police, electricity companies – and the list goes on forever – can no longer afford to live in our community because of no affordable housing?
As we all get older, we can no longer see our children or grandchildren, because they too have had to leave our area due to lack of housing.
The housing issue is complex, but it has been mainly driven by greed and a total lack of government will for decades, and those that have been in power the longest must bear the main thrust of blame.
Email, Jul 11
K. Bowman, Narara
Well said.
For some extra salt in the wound, read the Demographia International Housing Affordability Report from 2024 Q3. Short of it is, 4 of the 5 largest cities in Australia are “impossibly unaffordable”, with average house prices being over 9x average salaries.
Sydney is the 2nd worst in the WORLD, at almost 14x the average salary. As a nation, we sit above 9x. Reform is needed, and it’s needed yesterday
Try removing the incentives for the investors, that would be a good start.
It was pleasing to see both the story of homelessness, and the Forum letter about greedy investors in your last issue. They are,of course, closely related.
The answer to the housing shortage requires many approaches, but let me suggest just one. Fill up the dwellings that are continually empty. Where I live on the east side of Point Clare station there’re at least 10 empty liveable houses or units across just 4 small streets. This does not include new or for sale properties, nor are they holiday homes. Meanwhile, just 200 meters down the road in Goodaywang reserve, there are two homeless people living rough. There are many reasons for homelessness, and these people may not be suitable tenants, but I have seen families moved out of dwellings, only for the dwellings to remain empty.
Why would an owner keep a property vacant? According to the few owners I know, it’s because tenants are too much trouble. But also, the market continues to climb steadily, and the capital gain made on selling, even with tax, makes for a good investment. This market continues to remain high simply because it is kept that way by investors buying and selling.
Here are my suggestions on solving the housing crisis:
1) Phase out negative gearing
2)Increase capital gains tax
3)Tax homes that are empty /or incentivise owners to rent out dwellings (perhaps the government could go guarantor on damage beyond the bond)
Naturally, the above measures will cause investors to put some properties on the market, and the increased supply will cause prices to drop. But isn’t that what we ultimately want?
Maybe it doesn’t seem right that in a Democracy, people should be forced to do certain things with their hard-won property. But nor does it seem right that we live in a Society where increasing wealth lies with fewer rich members and their heirs, while families with both parents working hard can’t get a look in. Either renting or buying.