Brilliant. I really appreciate how you can simplify these matters for me. So many economists talk in riddles, I guess they don't understand the subject as thoroughly as you do.
Thanks for you kind comment. Sadly, when economists and politicians talk in riddles, it's not because they don't understand. It's because they don't want you to understand.
It may seem to be simply explained to you but it is only simple because the relevant details of what is involved are not taken into consideration or even initially understood by Mr Denniss and the result of this is false outcome.
Australians are definitely that at this moment i try telling people were i live that public housing should be for anyone who wants to rent and i just get laughed at.
@@GhostRangerr They don;t let you. they try to stop people votinh as routine in the USA, but be as dangerously ignorant as you like...how can a dangerously ignorant people do any harm, hey?
@@Stikibits Well that's what the government/elites want, a dangerously ignorant population so nobody would pay attention to their sinister agendas/wealth transfer. There's a reason why the education system has been in decline for years & all the history altering going on in the entertainment industry.
Well when one generation had all the voting power for 50 years, they got their way. Now are we younger generations supposed to respect and care for this gen in it's vulnerable years? Or should we turf them out in the street?
So annoying that most of these investors relied on the public housing to get the capital to do this. I hate the fact that these investors get to have the final say despite the fact that even if their properties became worthless they could still fall back on their 6 figure saleries that were already required to invest anyway.
We all had the opportunity to vote labor when Shorton was in! But we have nothing to blame but ourselves and the useless Liberal party that caused all this over 9 long horrible years! I don't vote for either party!
I own two houses (but I can’t afford to live in either of them as I work in Sydney and am forced to rent) and I seriously don't care if their value halved, if it mean all house prices halved - by disinsentivising investment in housing and back into productive creative and manufacturing businesses. (including businesses that innovate new house designs making them super cheap to build.)
That was great, definately do more of these. I feel super strange at the moment because I am in a position to buy/invest in property (as an *incredibly* privileged 22 year old) whilst also kind of being against the whole relationship of homeowners and renters, but the opportunity cost feels so high that it's constantly tugging at me.
99% chance that the only reason you can do that in the first place was because someone in your family at some point relied on public housing and free universities for you could get the capital to do it.
It is amazing that this seemingly obvious explaination of conditions of housing in Australia is never spoken of. Maybe it is because of the clout of the lobby groups! It is good to see Labor has a policy which "tests the water" on the supply side of the equation this time.
A good critique of landlord class interests. There are also the class interests of the finance capitalists aka 'the banks'. If house prices went down, mortgages wouldn't draw as much interest over the years. Still another factor is immigration policy which is currently set to increase the population of Australia. The increase in population will drive up demand for housing and as long as the supply of housing doesn't meet demand for housing the price of housing will continue to rise.
We've created a class of landlord of which most of our politicians are members. They basically own fiefdoms. Like the mafia or a feudal lord. The worst part of this is that most of the middle class of a certain age will argue they deserve it because of their personal grit and hard work. As if no one else who doesn't own a property and won't inherit money doesn't turn up for work each day. Of course, it has nothing to do with a social and economic system, or inheritance, which greased the wheels mighty well. Timing in this case is everything for the unwashed masses
I own a house. I want to see house prices fall. How else would my children be able to afford a house? Isnt our entire existence to give to our kids and make their lives better? This doesn't just mean for me and mine. Im sick and tired about hearing how we can fix our market and then watching nothing of substance occur.
I don’t get why the rent now is more than a mortgage for many. It used to always be that renting was a cheaper way to live albeit you never owned the place and had no asset to sell later. Both of my sons have stopped renting and moved back home, it’s just not tenable for them to rent. On another note however, we have a granny flat which is basically a 2 bedroom house, kitchen, dining room, laundry etc but because it shared the same property we aren’t allowed to rent it out except to immediate family. Go figure. We would have happily let it out for $150 a week so it could help us with our bills but the council won’t allow it. We can’t be the only ones with something like this so why are they imposing this ridiculous law in such dire times? And before anyone says we could just let people stay in it, if something happened such as a fire etc then we would be found out and jailed so it’s not a simple case of cash in the hand and being sneaky. I suspect the councillors who probably have a shitload of rentals themselves don’t want anything impacting on their greedy rents.
Thanks for the no nonsense explanation Richard. It would have been great for you to discuss the effect on owner occupiers under mortgage stress if prices fall, they could be pretty fucked if their banks foreclose. Just wondering if a period of stagnation, followed by a correction would be a more desirable outcome for owner occupiers with a mortgage, while also benefitting those who currently cannot afford to buy or rent?
It's one thing to have high prices for buying a house, it's a completely different thing when renting becomes unaffordable. Then people really have nowhere to go. Personally, I don't really care about owning a home but at least I would like to be able to rent one, not face jacked up rents a couple of times a year and get some stability of tenure. But even that seems to be too much to ask in Australia 😖
Thanks for this Richard. Any chance you could do a follow up and speak to why the government even cares about property investors taking a hit. I was under the impression that all investing is akin to gambling, i.e., there is risk associated with it. The government doesn't jump up and down if Bitcoin takes a dive so why would a decline in housing prices be any different.
Id say when the majority of voters are renters 51%, theyd vote for more homes. But all a party has to do to kick that problem down the road is too keep 51%+ of voters home owners.
I'm a house owner and would like to see house prices crash. Why? Because if they crash, I actually need less money to move houses if I need to, especially if I'm uprising. Second, my kids need to be able to buy a house when they leave home and wages vs house prices are totally disgusting. I don't want my kids to have to live at home for decades after they become adults, for their sake, not mine. I'd say if most home owners actually thought it through, they'd want the same. Lower prices are far better for almost everyone. Either that or much higher wages, maybe 5 to 10 times higher. Unlikely, so politicians and people should start growing g some brains and guts and start delivering for our most precious resources - our kids!
Nailed it! If house prices reduce significantly, then many will owe more than the house is worth. So what politician is going to campaign on the slogan of "I will destroy the value of your primary asset! Vote for me!" The government should have a policy of keeping housing at 2x to 5x average income. So, how to get housing more affordable? Let the value stagnate and in 30 years inflation will take care of it.
I am currently living in a second home in France. My wife and I have no incentive to flip it as here house prices don't go up at a ridiculous rate. Taxes on homes are high, demand for rentals is also high but rules in France better protect renters from frequent hikes in rents, and encourage owners to maintain a property to a liveable standard. I feel that in France there is this attitude that housing is not a commodity for profit. I rent my house in Sydney to my brother for a very low amount, otherwise he would be homeless.
So, housing is a necessity, right? Well, let's say basic, functional housing (no, I'm taking taking real estate ad euphemism!). So, if we look at other necessities, let's say menstruation sanitary products. Imagine if these had some sort of ridiculous investment incentive associated with them, and some people, regardless of need, decided to buy several boxes at once because they wanted to make money out them. Supplies would go down, prices would go up, and then the investors would sell their hoarded pads and tampons at inflated prices and in some sort of lease or subscription arrangement... Anyway, perhaps the analogy is breaking down here, but my point is that allowing individuals to own more than one (okay, or two) properties is mad, unless your aim is to further divide society between the haves and the have-nots...
Making housing a speculator's market has put a boot on the heads of 1/3 of the population. Welcome to feudalism MkII. You've been transported back 500 years. Privatise the profits, socialise the cost.
One investment property per person. No foreign investment in real estate (AKA a place for foreigners to park their corruption money). That simple policy would keep housing prices and rents down. I'd wager it's corruption of our politicians that results in such pain for younger Australians. But the No. 1 reason it's stuffed is fiat money, the unlimited ability for our government to print money out of thin air. We're all total morons for falling for it.
No mention of building regulations, land use laws, or zoning in pushing up home prices? There’s a reason there’s not skyscrapers full of condos everywhere.
EXACTLY 100% Correct. Regions in Australia are suffering, whilst the mega cities are no longer viable. At the expense of stupid LNP/ALP economic planning, Australians are now feeling more social pain.
Affordable mid-rise in the suburbs surrounding major population centers would increase supply and lower price pressure on outer suburbs. The problem is that for developers there are 2 options that maximise profits. 1. Build high rise apartments on very expensive land. 2. Convert farmland or bushland into suburbs far from the population centers and make the government subsidise the infrastructure. Short commute midrise lacks the high density per sqkm of land at high per unit volumes of inner city skyrise and lacks the low build cost per unit high volume of suburban development.
@@tariqlaattoe3900 I was specifically referring to developers and as to why this results in the housing situation we have. Obviously this isn't a problem for government housing projects mate.
If your vote swings elections, the government will give you what you want. Homeowners in Australia swing elections therefore they will always get favorable governments.
I don't think it's so much about a fall in house prices anymore; as you say no government would have the balls to engineer that. Unless a recession happens, a reduction or even stalling in the growth of the house price bubble is probably more realistic. It might allow time for wages, savings to catch up. But only if the current demand side issues are also addressed with large scale investment in social housing and higher density housing where people want to live. This seems well outside the willingness of any level of government at present.
all these grants just push up house prices because sellers know everyone has the ability to pay more. i hate the way things are and i will never be able to buy a house. fuck this
The housing market is geared for the existing owners of housing stock to buy an existing home off some other stock owner by seeing how much the bank will lend them against their stock. We have a "stock" market problem, not a housing supply problem.
Get all the homeless people to set up their tents in wealthy suburbs. Permanently. That will cause house prices to fall in the area. So by your logic then something will have to be done.
Actually some people who do own a home do want prices to fall because they want their kids to be able to live somewhere else that is not a van or a tent . Also some want to upsize and owning a home already isn't great in that instance if they can't hope to afford a better one (eg someone with a starter unit...). I TOTALLY agree that demand side is pushing price up but the elephant in the room with that is immigration pushing demand (although idiotic policies that give away money do too). As to the effects of this on society they are dire. I have seen it in my other country (Taiwan, I am a dual citizen). With a city like Sydney people on the wage of say a policeman, teacher or nurse can't afford to start a family without the bank of mum and dad. This leads to low birth rates which in time will reduce workforce, demand for certain things etc. Society needs such workers but at the moment they are pushed into higher paying jobs like being an a$£"%$%^hole real estate agent....
One extra thought, 'house owners' are often couples😊😊, not individuals, and 'investment property owners' are often couples too. All markets - houses, cars, education, whatever - are credit markets. This couple-ownership and residing-in-the-actual-capital-investment structure does matter, when looked at from a credit market point of view. Owning just one house that a couple also lives in means they are a couple renting from themselves for $0. And they can't readily sell it, realise the value. So it's a very sticky, illiquid piece of credit or capital. If they were really clear-minded, they would be either investors or residents but nobody, especially acting as one of a couple, is this rational. So the capital diverted into housing for past decades is illiquid, until... it isn't. From a credit market point of view, such sticky housing prices could in some extreme circumstances suddenly become a vast concern with a flood of capital releasing under extreme circumstances, but up to then... it's a very effective credit sink. The market in credit in all our economies is now accustomed to such consumption of supplied credit by this sink. Many would say, hopefully nothing at all changes. After all, what could go wrong? It's a bit like a tropical forest absorbing CO2... building up tinder... works great unless the climate warms up a bit and it dries out a little. There are ways government could promote early rightsizing and downsizing for seniors especially and make houses less illiquid and even releasing some credit for others but so far they haven't really touched it. A credit squeeze could change the politics of this.
Why do we need to "build" public, community housing. Just build normal affordable housing and let Local Govt Security deal with problem tenants. We could cap investment property at 2. By capping at 2, they would be forced to invest in other products, hopefully to Australia's strategic advantage. What are we SUBSIDISING investors for if their housing is set to double and tenants pay all their income to Landlords and they put that cash in tax free superannuation. How many times is that, that we give a resident tax breaks? I counted 6 different tax and subsidy doggybags. Fair do we think. Delivering an unaffordable, unstable housing market that is creating a black hole in our Federal Budget as less workers actually pay any tax or the Medicare Levy and then remaining taxpayers pay their mortgage interest on all their investment properties. Insane way to govern a country by SUBSIDISING people's speculation.
these tax breaks do not benefit my generation in the slightest. the government needs to change things or young people may become very disgruntled and either give up, or become full of hate for a system that does not help them
All political parties in the west have made the decision that they want property prices to rise forever and that to achieve this, the generations coming through must be left behind. They don't care if the young hate them, that is not the demographic that votes for them. All the young people I talk with blindly support mass immigration and even open borders after 25 years of brainwashing and indoctrination in the schools and universities. They mostly support the greens, who advocate for open borders, and cannot see the obvious connection between a rapidly increasing population and rapidly increasing property prices and rents. They are the ''Chickens for KFC" generation, unable to see the obvious and enthusiastically cheering on their own destruction via their support for the greens and by default, mass immigration. They are the stupidest generation in history not just in Australia, but in all western countries.
A good illustration of Richard Denniss's limited thinking is this statement he made "if we all owned a house and an investment property who would live in our investment property?" If he has not worked that one out I am not surprised because it illustrates his lack of imagination which time and time again shows why he should not be involved in making statements about economics and finance.
A big problem also we have a parliament filled with property investors for property investors no conflicts of interest here. Property and housing is meant to put a roof over people and families heads but it's become the domain of greed as young Australians know they'll never own a home without a lottery win or an inheritance. Put Richard in parliament he'd solve the problem quick which would allow more people to get into the housing market but would piss off greedy property investors as he and many know what's causing the problem that's only going to keep getting worse. Labor tried to do something about when Bill Shorten lost the unlosable election on the very issues of negative gearing and capital gains also franking credits. You can create more inequality with bad policy inflict robodebt on the poor who cares whatever but do not dare touch the rorts of the rich as 2 ginormous crooks Clive Palmer and The Murdoch media went into overdrive with their ad blitz against Labor selling them as tax hikes and Australia got the most corrupt federal government in Australian history the Morrison government so doing the right thing in the land of greed and self interest is politically suicide. It was once the land of a fair go not anymore greed is a very insidious human disease.
Successive governments keep kicking the can down the road. Housing is a completely unproductive asset. Our housing market is worth 10T. The total value of the ASX compared to that is only 2.5T. Like what the actual F. All this investment going into rent-seeking is going to destroy our productivity in the coming decades, it is absolutely short sighted and silly.
Richard Denniss says the measures have been making people able to go to an auction and bid a higher price. He would rather they go to an auction and not be able to bid because they did not have enough money to do so. His solution is to do away with these measures so people cannot bid what they presently are. To use his prawns example he wants people to go to auctions and pay less and still get house by removing this monetary assistance so they can't afford to bid and somehow the government will provide houses without people paying for the materials and skilled personnel to build them. But he omits the fact that the government will have to tax people to pay for those proposed houses and that will reduce the government's ability to spend the taxes on other things such as medical benefits and roads. He also argues in separate video that the tax deductibility of negative gearing for investors who build housing is bad thing despite it resulting in more houses being built and more rentals being built and available and later for sale. He is a guy who presents parts of full picture in one video and a different conflicting picture in another to fool less well informed groups . He is truly a two faced presenter. The question now is does Richard actually have brain because if he does it doesn't seem to be able to connect the dots.
Your understanding is seriously flawed due to your accurate observation. If 1/3 have to be renters so investors don't go bankrupt or have to pay their own house responsibly, then that 1/3, generally younger people, won't breed, won't care for the nation and be forced to rent until even that is unaffordable. Your describing an inevitable unsustainable domestic nightmare that ends in violence or an increasingly communist electorate demanding essentials. Then you describe governments allowing super to be substitute deposit method. So government bankrolling the housing scam is already targeting the future savings if the nation, another reason why Australia's 10 trillion dollar housing bubble is unsustainable, no matter the scheme, response or amount of immigrants they flood us with. Capitalism is what is required, and rises and falls occur in that system. Your confidence in this system based on the segregation of players or owners, investors and renters, doesn't explain when natural capitalism implements a normal crash to return AFFORDABILITY to the the table for the next bubble. It's boomers like you that had a normal wage that could cover the bills from one person who don't see what's coming. No kids, no marriage, videos games and no relationships, minimal costs for men, and investing in other things that no Australian seems to even understand outside of their limited, one investment blinder: housing and FOMO. Eventually people don't want the scam let alone can't afford it, and that's when you investors and owners will demand another bailout. The sooner the boomers shovel themselves into their grave, the sooner the millenials, Gen z and Gen Alpha will be able to do anything other than rent in this inflationary unaffordable environment of which our own government appears dumbfounded is one that discourages breeding or owning a massive debt home.
They will be replaced with foreigners, as is happening here and in all western countries. The choice they have is working 2 or 3 jobs just to pay the rent, living with their parents and hoping that they die as quickly as possible so they can own some property, or living in a van or tent.
You are right on a housing shortage and house prices but on negative geering capital gains should be left Now governments building homes like suburbs this can be a disaster Gettos happened as in the past so conditions of building like that would have to be closely watch with strict standards As for negative geering has to stay or people will stop buying housing investments for perhapes have maximum of 3 homes for negative geering House prices are extreme They will correct
Bad thinking and false numbers pushed by Richard Denniss to put across false story. What a goose. He states the 'majority of the people are literally invested in the current house price'. Utterly false because the majority of people, are not house or private dwelling owners at all. There are 11 million private dwellings in Australia and approximately 26 million people living in Australia. They do not all own houses and neither does the majority by far. Most people are not home owners since large proportion are renters (about 30%) . Renters do not want house prices to rise but want them to fall because lower rents depend on house prices falling.
Brilliant. I really appreciate how you can simplify these matters for me. So many economists talk in riddles, I guess they don't understand the subject as thoroughly as you do.
Thanks for you kind comment. Sadly, when economists and politicians talk in riddles, it's not because they don't understand. It's because they don't want you to understand.
It may seem to be simply explained to you but it is only simple because the relevant details of what is involved are not taken into consideration or even initially understood by Mr Denniss and the result of this is false outcome.
They have their own greedy agendas!
"Selfish, ignorant citizens elect selfish, ignorant people. It's that simple."
~George Carlin
Australians are definitely that at this moment i try telling people were i live that public housing should be for anyone who wants to rent and i just get laughed at.
"If voting made any difference' they wouldn't let us do it"
~Mark Twain
@@GhostRangerr They don;t let you. they try to stop people votinh as routine in the USA, but be as dangerously ignorant as you like...how can a dangerously ignorant people do any harm, hey?
@@Stikibits Well that's what the government/elites want, a dangerously ignorant population so nobody would pay attention to their sinister agendas/wealth transfer. There's a reason why the education system has been in decline for years & all the history altering going on in the entertainment industry.
Well when one generation had all the voting power for 50 years, they got their way. Now are we younger generations supposed to respect and care for this gen in it's vulnerable years? Or should we turf them out in the street?
So annoying that most of these investors relied on the public housing to get the capital to do this. I hate the fact that these investors get to have the final say despite the fact that even if their properties became worthless they could still fall back on their 6 figure saleries that were already required to invest anyway.
There’s a lot wrong with the housing system but don’t think all homeowners have massive salaries. Most don’t.
@@jasonh396 maybe not home owners but all investors with multiple houses, hell yeah they do
The big problem is that most politicians in Canberra are landlords, with vast portfolios. I dont hold out much hope for change
Hehe, isn't that called conflict of interest?
Not to mention that real estate companies & lobbyists are big contributors to both major political parties $$$
When you use housing as a speculative investment, then you've created a bubble.
We all had the opportunity to vote labor when Shorton was in! But we have nothing to blame but ourselves and the useless Liberal party that caused all this over 9 long horrible years! I don't vote for either party!
I own two houses (but I can’t afford to live in either of them as I work in Sydney and am forced to rent) and I seriously don't care if their value halved, if it mean all house prices halved - by disinsentivising investment in housing and back into productive creative and manufacturing businesses. (including businesses that innovate new house designs making them super cheap to build.)
That was great, definately do more of these. I feel super strange at the moment because I am in a position to buy/invest in property (as an *incredibly* privileged 22 year old) whilst also kind of being against the whole relationship of homeowners and renters, but the opportunity cost feels so high that it's constantly tugging at me.
99% chance that the only reason you can do that in the first place was because someone in your family at some point relied on public housing and free universities for you could get the capital to do it.
It is amazing that this seemingly obvious explaination of conditions of housing in Australia is never spoken of. Maybe it is because of the clout of the lobby groups! It is good to see Labor has a policy which "tests the water" on the supply side of the equation this time.
Yes, I concur. Richard is brilliant
A good critique of landlord class interests. There are also the class interests of the finance capitalists aka 'the banks'. If house prices went down, mortgages wouldn't draw as much interest over the years. Still another factor is immigration policy which is currently set to increase the population of Australia. The increase in population will drive up demand for housing and as long as the supply of housing doesn't meet demand for housing the price of housing will continue to rise.
From Canada, this is eerily appropriate for our situation as well.
Thank you for explaining that!!
We've created a class of landlord of which most of our politicians are members. They basically own fiefdoms. Like the mafia or a feudal lord.
The worst part of this is that most of the middle class of a certain age will argue they deserve it because of their personal grit and hard work. As if no one else who doesn't own a property and won't inherit money doesn't turn up for work each day.
Of course, it has nothing to do with a social and economic system, or inheritance, which greased the wheels mighty well. Timing in this case is everything for the unwashed masses
Thanks Richard susinct and relevant as always.
My deepest thanks 🙂👍
I'm borrowing this quote from legend George Carlin: "That's why it's called the "Australian" dream, because you've to sleep to believe it"
I own a house. I want to see house prices fall. How else would my children be able to afford a house?
Isnt our entire existence to give to our kids and make their lives better? This doesn't just mean for me and mine.
Im sick and tired about hearing how we can fix our market and then watching nothing of substance occur.
I don’t get why the rent now is more than a mortgage for many. It used to always be that renting was a cheaper way to live albeit you never owned the place and had no asset to sell later. Both of my sons have stopped renting and moved back home, it’s just not tenable for them to rent. On another note however, we have a granny flat which is basically a 2 bedroom house, kitchen, dining room, laundry etc but because it shared the same property we aren’t allowed to rent it out except to immediate family. Go figure. We would have happily let it out for $150 a week so it could help us with our bills but the council won’t allow it. We can’t be the only ones with something like this so why are they imposing this ridiculous law in such dire times? And before anyone says we could just let people stay in it, if something happened such as a fire etc then we would be found out and jailed so it’s not a simple case of cash in the hand and being sneaky. I suspect the councillors who probably have a shitload of rentals themselves don’t want anything impacting on their greedy rents.
Thanks for the no nonsense explanation Richard. It would have been great for you to discuss the effect on owner occupiers under mortgage stress if prices fall, they could be pretty fucked if their banks foreclose. Just wondering if a period of stagnation, followed by a correction would be a more desirable outcome for owner occupiers with a mortgage, while also benefitting those who currently cannot afford to buy or rent?
Australia = Some of the most expensive housing and 2nd highest level of private debt in the world....says something.
It's one thing to have high prices for buying a house, it's a completely different thing when renting becomes unaffordable. Then people really have nowhere to go. Personally, I don't really care about owning a home but at least I would like to be able to rent one, not face jacked up rents a couple of times a year and get some stability of tenure. But even that seems to be too much to ask in Australia 😖
Thanks for this Richard. Any chance you could do a follow up and speak to why the government even cares about property investors taking a hit. I was under the impression that all investing is akin to gambling, i.e., there is risk associated with it. The government doesn't jump up and down if Bitcoin takes a dive so why would a decline in housing prices be any different.
Industry super submission to Falinski committtee was about giving more tax concessions to super funds to invest in housing
Housing has to get out of all unearned retirement funds and that includes super funds.
Id say when the majority of voters are renters 51%, theyd vote for more homes. But all a party has to do to kick that problem down the road is too keep 51%+ of voters home owners.
I'm a house owner and would like to see house prices crash. Why? Because if they crash, I actually need less money to move houses if I need to, especially if I'm uprising. Second, my kids need to be able to buy a house when they leave home and wages vs house prices are totally disgusting. I don't want my kids to have to live at home for decades after they become adults, for their sake, not mine. I'd say if most home owners actually thought it through, they'd want the same. Lower prices are far better for almost everyone. Either that or much higher wages, maybe 5 to 10 times higher. Unlikely, so politicians and people should start growing g some brains and guts and start delivering for our most precious resources - our kids!
So so accurate,
I wonder what it takes for the government to understand this. We should hand them a book called "housing affordability for dummies" 😅
Nailed it! If house prices reduce significantly, then many will owe more than the house is worth. So what politician is going to campaign on the slogan of "I will destroy the value of your primary asset! Vote for me!" The government should have a policy of keeping housing at 2x to 5x average income. So, how to get housing more affordable? Let the value stagnate and in 30 years inflation will take care of it.
I am currently living in a second home in France. My wife and I have no incentive to flip it as here house prices don't go up at a ridiculous rate. Taxes on homes are high, demand for rentals is also high but rules in France better protect renters from frequent hikes in rents, and encourage owners to maintain a property to a liveable standard. I feel that in France there is this attitude that housing is not a commodity for profit. I rent my house in Sydney to my brother for a very low amount, otherwise he would be homeless.
Good explanations
Thats an excellent explanation.
So, housing is a necessity, right? Well, let's say basic, functional housing (no, I'm taking taking real estate ad euphemism!).
So, if we look at other necessities, let's say menstruation sanitary products. Imagine if these had some sort of ridiculous investment incentive associated with them, and some people, regardless of need, decided to buy several boxes at once because they wanted to make money out them. Supplies would go down, prices would go up, and then the investors would sell their hoarded pads and tampons at inflated prices and in some sort of lease or subscription arrangement... Anyway, perhaps the analogy is breaking down here, but my point is that allowing individuals to own more than one (okay, or two) properties is mad, unless your aim is to further divide society between the haves and the have-nots...
Making housing a speculator's market has put a boot on the heads of 1/3 of the population. Welcome to feudalism MkII. You've been transported back 500 years. Privatise the profits, socialise the cost.
One investment property per person. No foreign investment in real estate (AKA a place for foreigners to park their corruption money). That simple policy would keep housing prices and rents down. I'd wager it's corruption of our politicians that results in such pain for younger Australians. But the No. 1 reason it's stuffed is fiat money, the unlimited ability for our government to print money out of thin air. We're all total morons for falling for it.
Ban auctions, regulate the real estate industry, build more public housing and get rid of negative gearing.
No mention of building regulations, land use laws, or zoning in pushing up home prices? There’s a reason there’s not skyscrapers full of condos everywhere.
EXACTLY 100% Correct. Regions in Australia are suffering, whilst the mega cities are no longer viable. At the expense of stupid LNP/ALP economic planning, Australians are now feeling more social pain.
Steve Keen has an even better idea......check out the TNL housing affordability policy. It is on RUclips.
Affordable mid-rise in the suburbs surrounding major population centers would increase supply and lower price pressure on outer suburbs. The problem is that for developers there are 2 options that maximise profits.
1. Build high rise apartments on very expensive land.
2. Convert farmland or bushland into suburbs far from the population centers and make the government subsidise the infrastructure.
Short commute midrise lacks the high density per sqkm of land at high per unit volumes of inner city skyrise and lacks the low build cost per unit high volume of suburban development.
Or option 3. Take profit completely out of the equation then reassess your options. I think you'll find the solutions are more straight forward.
@@tariqlaattoe3900 I was specifically referring to developers and as to why this results in the housing situation we have. Obviously this isn't a problem for government housing projects mate.
@@SurmaSampo All good. Apologies, I misinterpreted your comment as addressing the problems associated with any solutions to the housing situation.
If your vote swings elections, the government will give you what you want. Homeowners in Australia swing elections therefore they will always get favorable governments.
I don't think it's so much about a fall in house prices anymore; as you say no government would have the balls to engineer that. Unless a recession happens, a reduction or even stalling in the growth of the house price bubble is probably more realistic. It might allow time for wages, savings to catch up. But only if the current demand side issues are also addressed with large scale investment in social housing and higher density housing where people want to live. This seems well outside the willingness of any level of government at present.
all these grants just push up house prices because sellers know everyone has the ability to pay more. i hate the way things are and i will never be able to buy a house. fuck this
The housing market is geared for the existing owners of housing stock to buy an existing home off some other stock owner by seeing how much the bank will lend them against their stock. We have a "stock" market problem, not a housing supply problem.
Get all the homeless people to set up their tents in wealthy suburbs. Permanently. That will cause house prices to fall in the area. So by your logic then something will have to be done.
First prawn buyers?
Actually some people who do own a home do want prices to fall because they want their kids to be able to live somewhere else that is not a van or a tent . Also some want to upsize and owning a home already isn't great in that instance if they can't hope to afford a better one (eg someone with a starter unit...).
I TOTALLY agree that demand side is pushing price up but the elephant in the room with that is immigration pushing demand (although idiotic policies that give away money do too).
As to the effects of this on society they are dire. I have seen it in my other country (Taiwan, I am a dual citizen). With a city like Sydney people on the wage of say a policeman, teacher or nurse can't afford to start a family without the bank of mum and dad. This leads to low birth rates which in time will reduce workforce, demand for certain things etc. Society needs such workers but at the moment they are pushed into higher paying jobs like being an a$£"%$%^hole real estate agent....
One extra thought, 'house owners' are often couples😊😊, not individuals, and 'investment property owners' are often couples too.
All markets - houses, cars, education, whatever - are credit markets. This couple-ownership and residing-in-the-actual-capital-investment structure does matter, when looked at from a credit market point of view. Owning just one house that a couple also lives in means they are a couple renting from themselves for $0. And they can't readily sell it, realise the value. So it's a very sticky, illiquid piece of credit or capital. If they were really clear-minded, they would be either investors or residents but nobody, especially acting as one of a couple, is this rational. So the capital diverted into housing for past decades is illiquid, until... it isn't.
From a credit market point of view, such sticky housing prices could in some extreme circumstances suddenly become a vast concern with a flood of capital releasing under extreme circumstances, but up to then... it's a very effective credit sink. The market in credit in all our economies is now accustomed to such consumption of supplied credit by this sink.
Many would say, hopefully nothing at all changes.
After all, what could go wrong? It's a bit like a tropical forest absorbing CO2... building up tinder... works great unless the climate warms up a bit and it dries out a little.
There are ways government could promote early rightsizing and downsizing for seniors especially and make houses less illiquid and even releasing some credit for others but so far they haven't really touched it. A credit squeeze could change the politics of this.
Why do we need to "build" public, community housing. Just build normal affordable housing and let Local Govt Security deal with problem tenants. We could cap investment property at 2. By capping at 2, they would be forced to invest in other products, hopefully to Australia's strategic advantage. What are we SUBSIDISING investors for if their housing is set to double and tenants pay all their income to Landlords and they put that cash in tax free superannuation. How many times is that, that we give a resident tax breaks? I counted 6 different tax and subsidy doggybags. Fair do we think. Delivering an unaffordable, unstable housing market that is creating a black hole in our Federal Budget as less workers actually pay any tax or the Medicare Levy and then remaining taxpayers pay their mortgage interest on all their investment properties. Insane way to govern a country by SUBSIDISING people's speculation.
these tax breaks do not benefit my generation in the slightest. the government needs to change things or young people may become very disgruntled and either give up, or become full of hate for a system that does not help them
All political parties in the west have made the decision that they want property prices to rise forever and that to achieve this, the generations coming through must be left behind. They don't care if the young hate them, that is not the demographic that votes for them. All the young people I talk with blindly support mass immigration and even open borders after 25 years of brainwashing and indoctrination in the schools and universities. They mostly support the greens, who advocate for open borders, and cannot see the obvious connection between a rapidly increasing population and rapidly increasing property prices and rents. They are the ''Chickens for KFC" generation, unable to see the obvious and enthusiastically cheering on their own destruction via their support for the greens and by default, mass immigration. They are the stupidest generation in history not just in Australia, but in all western countries.
A good illustration of Richard Denniss's limited thinking is this statement he made "if we all owned a house and an investment property who would live in our investment property?"
If he has not worked that one out I am not surprised because it illustrates his lack of imagination which time and time again shows why he should not be involved in making statements about economics and finance.
A big problem also we have a parliament filled with property investors for property investors no conflicts of interest here. Property and housing is meant to put a roof over people and families heads but it's become the domain of greed as young Australians know they'll never own a home without a lottery win or an inheritance. Put Richard in parliament he'd solve the problem quick which would allow more people to get into the housing market but would piss off greedy property investors as he and many know what's causing the problem that's only going to keep getting worse. Labor tried to do something about when Bill Shorten lost the unlosable election on the very issues of negative gearing and capital gains also franking credits. You can create more inequality with bad policy inflict robodebt on the poor who cares whatever but do not dare touch the rorts of the rich as 2 ginormous crooks Clive Palmer and The Murdoch media went into overdrive with their ad blitz against Labor selling them as tax hikes and Australia got the most corrupt federal government in Australian history the Morrison government so doing the right thing in the land of greed and self interest is politically suicide. It was once the land of a fair go not anymore greed is a very insidious human disease.
Successive governments keep kicking the can down the road. Housing is a completely unproductive asset. Our housing market is worth 10T. The total value of the ASX compared to that is only 2.5T. Like what the actual F. All this investment going into rent-seeking is going to destroy our productivity in the coming decades, it is absolutely short sighted and silly.
Richard Denniss says the measures have been making people able to go to an auction and bid a higher price. He would rather they go to an auction and not be able to bid because they did not have enough money to do so.
His solution is to do away with these measures so people cannot bid what they presently are.
To use his prawns example he wants people to go to auctions and pay less and still get house by removing this monetary assistance so they can't afford to bid and somehow the government will provide houses without people paying for the materials and skilled personnel to build them.
But he omits the fact that the government will have to tax people to pay for those proposed houses and that will reduce the government's ability to spend the taxes on other things such as medical benefits and roads.
He also argues in separate video that the tax deductibility of negative gearing for investors who build housing is bad thing despite it resulting in more houses being built and more rentals being built and available and later for sale.
He is a guy who presents parts of full picture in one video and a different conflicting picture in another to fool less well informed groups .
He is truly a two faced presenter.
The question now is does Richard actually have brain because if he does it doesn't seem to be able to connect the dots.
Your understanding is seriously flawed due to your accurate observation. If 1/3 have to be renters so investors don't go bankrupt or have to pay their own house responsibly, then that 1/3, generally younger people, won't breed, won't care for the nation and be forced to rent until even that is unaffordable. Your describing an inevitable unsustainable domestic nightmare that ends in violence or an increasingly communist electorate demanding essentials. Then you describe governments allowing super to be substitute deposit method. So government bankrolling the housing scam is already targeting the future savings if the nation, another reason why Australia's 10 trillion dollar housing bubble is unsustainable, no matter the scheme, response or amount of immigrants they flood us with. Capitalism is what is required, and rises and falls occur in that system. Your confidence in this system based on the segregation of players or owners, investors and renters, doesn't explain when natural capitalism implements a normal crash to return AFFORDABILITY to the the table for the next bubble. It's boomers like you that had a normal wage that could cover the bills from one person who don't see what's coming. No kids, no marriage, videos games and no relationships, minimal costs for men, and investing in other things that no Australian seems to even understand outside of their limited, one investment blinder: housing and FOMO. Eventually people don't want the scam let alone can't afford it, and that's when you investors and owners will demand another bailout. The sooner the boomers shovel themselves into their grave, the sooner the millenials, Gen z and Gen Alpha will be able to do anything other than rent in this inflationary unaffordable environment of which our own government appears dumbfounded is one that discourages breeding or owning a massive debt home.
They will be replaced with foreigners, as is happening here and in all western countries. The choice they have is working 2 or 3 jobs just to pay the rent, living with their parents and hoping that they die as quickly as possible so they can own some property, or living in a van or tent.
You are right on a housing shortage and house prices but on negative geering capital gains should be left Now governments building homes like suburbs this can be a disaster Gettos happened as in the past so conditions of building like that would have to be closely watch with strict standards As for negative geering has to stay or people will stop buying housing investments for perhapes have maximum of 3 homes for negative geering House prices are extreme They will correct
Bad thinking and false numbers pushed by Richard Denniss to put across false story.
What a goose.
He states the 'majority of the people are literally invested in the current house price'.
Utterly false because the majority of people, are not house or private dwelling owners at all.
There are 11 million private dwellings in Australia and approximately 26 million people living in Australia. They do not all own houses and neither does the majority by far.
Most people are not home owners since large proportion are renters (about 30%) .
Renters do not want house prices to rise but want them to fall because lower rents depend on house prices falling.