The Housing Crisis

[SBD]

What they could do is get creative and flexible perhaps.
From my experience, my parents and grand parents, uncles and aunties and cousins, the properties they've bought over the years since before I was born, wasn't as an investment to increase their immediate wealth, but for future generations. For their kids and so on. Sure they rent them out in the meantime to help pay down mortgages, but the primary purpose of buying those houses was an investment in their kids futures so they have a house to live in.
This sort of scenario, which is quite common in non-Anglo European families in Australia, shouldn't be punished or treated the same as other scenarios. If anything it's probably more comparable to the government creating the superannuation system. Future proofing.
And this shouldn't even have to be a thing, but they coming from countries that have experienced a lot more turmoil and ups and downs then Australia ever has in it's short history, could foresee these troubling times as a possibility.
We should be a country where you can work an honest job, and be able to afford to put a roof over your head and live comfortably.

That's quite a different scenario to the people you read about in the media every month or so who have gone from for eg $40k in savings to having a property portfolio of $10million.
These people should be treated as a type of business with different taxation rules etc.

Owning two or three properties so that you can ensure your kids have a roof over their heads when they're adults and enter the work force, is quite a different situation to buying up as many properties as you can for personal financial gain.

But imho this is only one small part of fixing the problems.
We've technically become poorer in Australia, with negative wage growth far worse then any other nation in the OECD. Perhaps stop importing hundreds of thousands of people every year so that there isn't downward pressure on wages, and also created higher demand for fewer and fewer houses(more demand then supply = higher prices) would be a good place to start too, since they've openly said they have no desire to see house prices come down but continue to grow.

So in your first scenario, people accumulate residential property to become the "Housing Trust of Mum and Dad". They are landlords who have a clear intent to eventually evict their tenants so that family can occupy the property. You see that' as a "good" use of their capital.

In your second scenario, people accumulate residential property purely for the purpose of investment to be able to be the "Bank of Mum and Dad". They have no intent of occupying it themselves, and would love to have stable tenants long-term. They use legal means to defer tax obligations. You see that as a "bad" use of their capital.

In both cases, the families who are able to get started in owning property accumulate more, and those families who never get started continue to rely on rental property.

[abc]

its an unfortunate aspect of anglo culture not to think ahead and trust the government is going to look after you whilst seeing family as something to get away from ASAP, until someone dies then its like a pack of vultures

[rev]

What they could do is get creative and flexible perhaps.
From my experience, my parents and grand parents, uncles and aunties and cousins, the properties they've bought over the years since before I was born, wasn't as an investment to increase their immediate wealth, but for future generations. For their kids and so on. Sure they rent them out in the meantime to help pay down mortgages, but the primary purpose of buying those houses was an investment in their kids futures so they have a house to live in.
This sort of scenario, which is quite common in non-Anglo European families in Australia, shouldn't be punished or treated the same as other scenarios. If anything it's probably more comparable to the government creating the superannuation system. Future proofing.
And this shouldn't even have to be a thing, but they coming from countries that have experienced a lot more turmoil and ups and downs then Australia ever has in it's short history, could foresee these troubling times as a possibility.
We should be a country where you can work an honest job, and be able to afford to put a roof over your head and live comfortably.

That's quite a different scenario to the people you read about in the media every month or so who have gone from for eg $40k in savings to having a property portfolio of $10million.
These people should be treated as a type of business with different taxation rules etc.

Owning two or three properties so that you can ensure your kids have a roof over their heads when they're adults and enter the work force, is quite a different situation to buying up as many properties as you can for personal financial gain.

But imho this is only one small part of fixing the problems.
We've technically become poorer in Australia, with negative wage growth far worse then any other nation in the OECD. Perhaps stop importing hundreds of thousands of people every year so that there isn't downward pressure on wages, and also created higher demand for fewer and fewer houses(more demand then supply = higher prices) would be a good place to start too, since they've openly said they have no desire to see house prices come down but continue to grow.

So in your first scenario, people accumulate residential property to become the "Housing Trust of Mum and Dad". They are landlords who have a clear intent to eventually evict their tenants so that family can occupy the property. You see that' as a "good" use of their capital.

In your second scenario, people accumulate residential property purely for the purpose of investment to be able to be the "Bank of Mum and Dad". They have no intent of occupying it themselves, and would love to have stable tenants long-term. They use legal means to defer tax obligations. You see that as a "bad" use of their capital.

In both cases, the families who are able to get started in owning property accumulate more, and those families who never get started continue to rely on rental property.

There's a big difference between owning 2-3 homes to leave to your kids, and dozens of homes that is intended to make that person/persons rich/allow them to live an opulent life style in the immediate.

[SBD]

What they could do is get creative and flexible perhaps.
From my experience, my parents and grand parents, uncles and aunties and cousins, the properties they've bought over the years since before I was born, wasn't as an investment to increase their immediate wealth, but for future generations. For their kids and so on. Sure they rent them out in the meantime to help pay down mortgages, but the primary purpose of buying those houses was an investment in their kids futures so they have a house to live in.
This sort of scenario, which is quite common in non-Anglo European families in Australia, shouldn't be punished or treated the same as other scenarios. If anything it's probably more comparable to the government creating the superannuation system. Future proofing.
And this shouldn't even have to be a thing, but they coming from countries that have experienced a lot more turmoil and ups and downs then Australia ever has in it's short history, could foresee these troubling times as a possibility.
We should be a country where you can work an honest job, and be able to afford to put a roof over your head and live comfortably.

That's quite a different scenario to the people you read about in the media every month or so who have gone from for eg $40k in savings to having a property portfolio of $10million.
These people should be treated as a type of business with different taxation rules etc.

Owning two or three properties so that you can ensure your kids have a roof over their heads when they're adults and enter the work force, is quite a different situation to buying up as many properties as you can for personal financial gain.

But imho this is only one small part of fixing the problems.
We've technically become poorer in Australia, with negative wage growth far worse then any other nation in the OECD. Perhaps stop importing hundreds of thousands of people every year so that there isn't downward pressure on wages, and also created higher demand for fewer and fewer houses(more demand then supply = higher prices) would be a good place to start too, since they've openly said they have no desire to see house prices come down but continue to grow.

So in your first scenario, people accumulate residential property to become the "Housing Trust of Mum and Dad". They are landlords who have a clear intent to eventually evict their tenants so that family can occupy the property. You see that' as a "good" use of their capital.

In your second scenario, people accumulate residential property purely for the purpose of investment to be able to be the "Bank of Mum and Dad". They have no intent of occupying it themselves, and would love to have stable tenants long-term. They use legal means to defer tax obligations. You see that as a "bad" use of their capital.

In both cases, the families who are able to get started in owning property accumulate more, and those families who never get started continue to rely on rental property.

There's a big difference between owning 2-3 homes to leave to your kids, and dozens of homes that is intended to make that person/persons rich/allow them to live an opulent life style in the immediate.

Negative gearing only works for the long term as by definition the current-term income is negative. The difference between two or three and ten or twenty is only a measure of success (or appetite for risk, or the number of kids). The purpose of providing a house to each kid is so that they can live an opulent lifestyle. I'm still not really seeing the difference.

The trouble with highlighting a few examples from the news is that by being worthy of reporting, they are the extremes.There's now "news" in reporting that an average person owns between one and two houses, but there is news in reporting that someone relatively young has amassed a large property portfolio, and the sound bite is short enough that we don't see what sacrifices, help, and luck got them there.

[rev]

Politicians: Don't worry Australia, our policies might have fucked up your cost of living, driven up power prices beyond affordable, but we'll give you some relief with more subsidies..just ignore the fact you're going to pay for the subsidies, and so will your kids and their kids.

[rubberman]

Politicians: Don't worry Australia, our policies might have fucked up your cost of living, driven up power prices beyond affordable, but we'll give you some relief with more subsidies..just ignore the fact you're going to pay for the subsidies, and so will your kids and their kids.

Case in point. With new smart meters, some companies are looking at demand tariffs where if you go over a certain energy demand for one hour on one day, you get charged extra for the whole month!!!

Or...charging extra network fees for renewables when in many cases, having a renewable source and batteries nearby means less reliance on the network. WTF?

The government should be hauling network operators and retailers over the coals.

[rev]

‘Eye-watering’ developer fees worsening SA’s housing crisis, says Neville Roberts
An SA developer has blasted an SA Water fee to connect just three new homes, saying “eye-watering” costs and taxes are making smaller projects unviable.

Darren Chaitman
2 min read
March 3, 2025 - 5:00AM
The Messenger

SANFL star turned-property developer Neville Roberts says “eye-watering” government costs and taxes are making many small-scale housing developments unviable.

Mr Roberts is converting land in Wallaroo, on the Yorke Peninsula, into three small blocks for single residences, but he has been stunned by a $121,000 water connection bill from SA Water for the sites.

He said the bill almost doubled a quote of $76,000 by a private contractor for the same job, which would require an extension of the water mains.



But if he used the contractor, he would still be forced to pay more to meet SA Water’s rigorous requirements for works on their infrastructure, making the contractor option even more expensive.

Mr Roberts said it was another example of excessive government costs – such as land tax, a new non-refundable GST, and council fees – pushing small developers out of the market.

“The cost is eye-watering,” he said. “Simply eye-watering.

“If you are a commercial developer of a small-scale, the purchase price, the development costs and the taxes will make five out of 10 developments non-viable.”

He said the situation was better for significant land developers who could negotiate with the government for discounts on government land.

“Part of the housing crisis that we have is the supply of land, and it’s no surprise to me that the supply of land has tripped on the back of developers like myself doing our numbers and finding that it’s not a viable transaction – so we move on,” Mr Roberts said.

Another of his developments, a 35-lot subdivision in Kadina completed in 2022, cost Mr Roberts $895,000 in taxes and government fees.

He said the costs would have made the “very small development in regional South Australia” unviable if he had not bought the land as a distressed site.

An SA Water spokesman said the Wallaroo job was “not a standard request for new connections as the allotments are located in a largely vacant area not connected to our water network”.

“This means we need to extend an existing water main with around 60 metres of new pipe to service the allotments,” he said. “The new section of water main is also required to be installed underneath a roundabout within a busy thoroughfare and requires extensive traffic management to ensure it can be undertaken safely.

“The package of work we quoted to Mr Roberts includes all end-to-end services required to connect these proposed allotments.”
Housing Minister Nick Champion was contacted for comment.

https://www.adelaidenow.com.au/subscrib ... nt-2-SCORE

[Nathan]

Developer buying cheap land to turn around for a quick buck discovers why it's cheap to begin with.

[rev]

The point isn't about some medium or bigger developers having to foot the bill.

The point is that if an ordinary person wants to subdivide their land or develop it, is it affordable?
It should be, even without a housing/cost of living crisis.

Why should it be affordable? because if it's not, then the only options we will have left is big greedy corporate developers.

Maybe these additional costs is something the government needs to look at, and not only removing stamp duty for first home buyers.

[rubberman]

Developer buying cheap land to turn around for a quick buck discovers why it's cheap to begin with.

Yup. These guys want to buy cheap unserviced land, and make the taxpayer subsidise the cost of servicing it.

As it stands, the developer has to build, using the private sector, all services internal to the subdivision. Plus the cost of connection to the main system. Plus the cost of expanding the headworks, such as dams, treatment plants, and pumping stations, using water as an example. Almost all of which is done by private sector contractors.

Why shouldn't they? Who else should pay for their services in their subdivisions and for other necessary system additions that extra demand needs?

[Bobski]

Not a fan of shared equity schemes and I don't expect this will do much, if anything, to address the current crisis but noting for the record:

Income caps and property price caps for Labor's "Help to Buy" shared equity scheme are set to rise as part of next week's federal budget.

The government argues the changes will make the scheme accessible for more people to buy a wider range of properties.

The scheme, which allows 40,000 homebuyers to "co-buy" their home with the government, won't open until later this year.

Help to Buy allows homebuyers to "co-buy" their property with the government, reducing the size of the deposit and mortgage needed to buy a home.

Those in the scheme can have the government take a 30 per cent slice of an existing home, or a 40 per cent slice of a new home, which can be bought out over time.

Some first home buyers could find their way into the market sooner under a new federal government scheme. Here's what to know.

Under the new changes, the income cap will be lifted for both singles and couples looking to buy a home, and the price caps for properties will also be raised.

For singles the income cap will lift from $90,000 to $100,000, and for couples or single parents, it climbs from $120,000 to $160,000.

Source

[rev]

Demand vs supply.

Everything else is political bs in an election year.

[HiTouch]

It doesn't take an economist to know that price caps only work if there is enough supply, security and policing. Which there is none of those. Once the cap comes off, prices skyrocket.

[Bobski]

To me it's just an admission that the government (& opposition) are not prepared to do what it would take to make housing affordable, so instead they're going to "help" people take on massive mortgages, to buy unaffordable housing, and then take a cut themselves when the property is sold. And they're marketing this as a good deal for buyers? Pfft.

Some people are, understandably, so desperate that they will take them up on the offer, and then, based on those income thresholds, almost immediately find themselves in mortgage stress. And what happens if someone buys a home on this scheme and then gets a promotion or raise, taking them over the income limit? Has that been addressed?

[otech]

To me, the biggest mistake ever made was the introduction of negative gearing tax laws during the 80's. To turn a necessity like housing into an investment strategy was dire.

I do believe Paul Keating tried to reverse it soon after it was introduced but then back-tracked on that almost immediately.

Property investment has since become so popular (and successful for the investors) that it is far too big to reverse, we are talking in the TRILLIONS of dollars in property values. So much so that it would be a threat to the entire Australian economic system if it was ever canned. Just won't happen.

One idea thrown about is to make future negative gearing available on new builds only. Sounds pretty sensible, but that in turn has problems all of it's own.

Negative gearing was introduced nearly 100 years ago, to stimulate construction investment.

Keating did remove it in the 80's, to disastrous effect, and it was promptly reinstated.

Its not negative gearing thats the problem.