https://www.afr.com/chanticleer/cou...-housing-affordability-crisis-20211201-p59dxa Chanticleer Could ‘speed’ help solve the housing affordability crisis? Domain boss Jason Pellegrino says the velocity of the residential property market lies at the heart of solving the affordability crisis. Dec 2, 2021 It was difficult not to come away from The Australian Financial Review Property Summit on Wednesday with the sense that Australia will probably solve the mysteries of quantum computing before it solves the housing affordability crisis. Mirvac boss Susan Lloyd-Hurwitz summed up the heart of the problem neatly – “It’s saving for that deposit, which for the average couple on a median income is nine to 10 years for the median house, which is an extraordinarily long time in Sydney” – but finding answers was much more difficult. Housing affordability is everyone’s problem but no one’s responsibility. David Rowe Lloyd-Hurwitz, Stockland chief executive Tarun Gupta, CoreLogic boss Lisa Claes, and Domain chief Jason Pellegrino examined a few of the many moving parts in this debate, including land availability, immigration, and government policy. Pellegrino, whose company is 60 per cent owned by Nine Entertainment, publisher of The Australian Financial Review, is right when he says a holistic approach is needed. Take the chronic undersupply of smaller blocks (less than 600 square metres) in NSW. Or the prohibitive stamp duty burden. Or the problem of unproductive housing stock. “You have an extraordinary number of vacant bedrooms of people who are not downsizing and providing that stock back into the pool for others to buy because that process of downsizing is just way too complex, there’s way too much risk, and it’s not transparent,” Pellegrino says. The key to any solution, he argues, is the speed at which the market moves. “Work systematically through every single feature and every single block on the supply side and the demand side or the tax policy with one outcome in mind: the outcome is velocity. “The easiest way to solve more of the issues is to actually increase the velocity of the marketplace so that the right people can be in the right property at the right time of their life.” A faster-moving market would be great for a real estate classifieds business, of course, but nonetheless it’s an interesting idea. Consider Pellegrino’s three problems as a starting point. Getting more first-time buyers access to a greater number of smaller blocks should help get more people into the market faster. Reducing stamp duty should mean more transactions occur, more often, allowing more people to move to the next stage of their property journey. Creating incentives to encourage people to downsize from family homes sooner puts more of this vital stock into the market. The problem, of course, is who has the political will to make this happen. Which local government is going to increase the supply of smaller lots? Which state will accept less stamp duty to allow more of its taxpayers to get on the property ladder? Which government will make it clear they want empty-nesters to move on to the next stage of their lives? Housing affordability slips through the cracks – it’s everyone’s problem to solve, which means no one takes ownership and no one takes the sort of holistic approach Pellegrino suggests. Meanwhile, 10 years to save for a deposit will become 12. And then 15. And then 20. And then...
......and lets now too conveniently overlook one of the other biggest scams about, the amount of commission agents make when properties are bought and sold.
Property rows soar as divorce hits new highs https://www.afr.com/wealth/personal...oar-as-divorce-hits-new-highs-20211203-p59em8 Divorce specialists claim there has been a threefold increase in separation applications after COVID-19 lockdowns, with high property prices creating more friction. Duncan Hughes Reporter Dec 8, 2021 Rising property prices are causing delays and bottlenecks for record numbers of couples seeking separation because of irreconcilable breakdowns during the COVID-19 lockdowns. Lawyers and counsellors say there has been a threefold increase in the number of divorce applications, which are not yet being reflected in government numbers that show only a marginal rise. Separating couples are finding it difficult to settle on a price for their home because the market is moving so rapidly. istock “Every lawyer and forensic accountant I deal with has never been so busy,” Suzanne Delbridge, director of Delbridge Forensic Accounting, says of the post-pandemic marital fallout. Angela Harbinson, chief executive of The Separation Guide, an online platform that advises on separation and divorce, says there has been a 230 per cent spike in the number of couples being referred to its services, a doubling in requests for psychologists and an 85 per cent rise in couples “thinking about separating”. Harbinson says about 73 per cent of those seeking help have a family home and 24 per cent an investment property. Courtney Mullen, head of family law (Canberra) for Australian Family Lawyers, blames the “pressure-cooker” tensions that built up during lockdowns thanks to working and educating children from home. “Families have been in each other’s faces without being able to escape,” Mullen says. Added delays and expense Rapidly rising property prices are creating issues for many couples seeking an equitable division, particularly in real estate hotspots such as Melbourne and Sydney where prices are rising at the fastest clip since 2004. “It is very difficult for many couples to settle on a price for their home, holiday home and investment properties because the market is moving so rapidly,” Delbridge says. Property prices have risen more than 18 per cent in the past 12 months, according to CoreLogic, which monitors property prices. “There is a lot of uncertainty on the value of the properties before they divorce, and they are seeking clarity,” she says.
Another issue, house and backyards are being supplied smaller each year. Most new houses I see have very little outdoor space, the houses themselves are smaller, people are becoming crammed up. Now in Asia for example, dwelling are often small, but the difference being, many Asians are surrounded by shopping precincts, malls and social areas, whereby in Australia, much of housing is built in suburbs not surrounded by such. Distances are large in Australia, the climate can be hot, not conducive to walking to a shopping strip. Living with a family cooped up in a small house with very little outdoor area for gardens, trees, lawn, will send you mad in a short period of time. These small houses being built these days, at high prices, is going to create ghettos with many community issues. Kids are going to become delinquints. Govenments have their heads stuck up their ass.
Tax reform is what the election should be about The OECD and IMF again agree Australia’s tax system is unfit for purpose. The need to take the case for change to an election is urgent in a country that must increase growth to pay its pandemic debts. Dec 7, 2021 https://www.afr.com/policy/tax-and-...-the-election-should-be-about-20211206-p59fay Why does it take international economic boffins to tell us the kind of things the coming election should be really about? This week the Organisation for Economic Co-operation and Development and the International Monetary Fund both concluded that something as fundamental as Australia’s tax system is unfit for purpose, in dire need of reform, and actually kills the economic growth that the country now urgently needs to pay its pandemic debts. Australia is not a high taxing country. The Coalition government limits the tax take to 23.9 per cent of GDP, and overall Australia is eighth lowest out of 38 in the OECD after excluding the 10 per cent compulsory superannuation contribution. By any international benchmark, however, the tax system is just ill-configured. Data from the OECD shows that Australia has the second highest personal tax take in the 38-strong developed nations club. Taxes on personal income account for 42 per cent of federal and state government tax revenue, nearly double the OECD average. Taxes on company profits account for 17 per cent of government tax revenue, against 9.6 per cent on average in the rest of the OECD. Yesterday the IMF repeated, as it has for many years, that Australia “needs to reduce its relatively high share of direct taxes, by lessening the corporate income tax burden and relying more on indirect taxes, like the GST”. Too big a bite of wages and profits blunts incentive and hurts investment. That hobbles the capital workers have to work with, and so reduces their productivity – and hence reduces their price, or wage. A relatively high rate of tax that cuts into a relatively low level of personal income reduces the returns to working extra hours, and so discourages it. Despite a welcome flattening of tax brackets by the Morrison government, too much still will be taken back by bracket creep. The high proportion of tax taken from income means a lower proportion of less distorting and less avoidable tax on consumption. Senseless exemptions Government reliance on indirect taxes such as the GST is the seventh lowest in the OECD. The senseless exemptions in the GST tax base means that Australia’s consumption tax covers less and less actual consumption. And the OECD figures just confirm that state governments are addicted to boom-and-bust property taxes, another target of the IMF’s criticism. Australia’s property taxes are double the OECD average. That hits the ability of workers to move to better paying and more productive jobs. As Ken Henry noted in his landmark 2010 tax review, this entire tax edifice will not be suastainable as the salary earners governments now depend upon age and retire. Yet no government wants to take the case for change to an election. Higher GST is the norm Among Europe’s OECD members, it’s widely accepted that higher rates of GST pay for generous welfare states. Here all focus is on the regressive effects on lower earners, and successive governments have backed away from tackling it: Dr Henry’s review was forbidden by Labor treasurer Wayne Swan from looking for an answer, and Liberal prime minister Malcolm Turnbull killed off a discussion started by Joe Hockey as treasurer in 2015. New Zealand has a higher rate of GST on everything, which helps it sustain lower marginal tax penalties on work; that shows up in a higher proportion of people in the labour force than in Australia. The Kiwis’ reliance on a GST is progressive, not regressive. All these arguments were being made before Australia’s national debt blew out for decades to come. The federal government has, out of necessity, pumped up the economy with borrowed money. Voters will, unusually, go to the next election both cashed up on support payments and more numbed to any debt numbers that either side throws at them. The government will hope that this looks like proof positive of its economic management credentials in the pandemic. But its economic platform needs to include a plan to purposefully repay the debt, not just to hope it happens. As it happens, a tax system that does less to discourage economic growth would make it less challenging to decarbonise Australia’s fossil fuel-intensive economy by grasping its potential comparative advantage in a low-carbon world.
https://www.afr.com/policy/economy/...risis-leading-to-fewer-babies-20211209-p59g8v Housing affordability crisis leading to fewer babies Ronald Mizen Economics correspondent Dec 11, 2021 Affordability for first home buyers continued to deteriorate last financial year, which demographers and social researchers believe is contributing to couples having smaller families and taking longer to start them. Across Australia, 50 per cent of available houses are now affordable to just the top 20 per cent of first home buyers by income, while for the bottom 40 per cent fewer than one in five houses is affordable. Saving for a house deposit takes on average 10.8 years for an Australian first home buyer. Bloomberg That’s a marked deterioration on just 18 months ago, according to the latest affordability analysis from the National Housing Finance and Investment Corporation (NHFIC). Social trends researcher Rebecca Huntley labelled the situation chronic unaffordability and said it was having far broader ramifications than people may expect. “Certainly in my qualitative research, I get very much the conversations of, ‘We either buy a house or have a child’,” Dr Huntley said. “We have to make a decision between those two because we can’t do both.” In Sydney, 75 per cent of houses are affordable to just the top 20 per cent of first home buyers, while for the bottom 40 per cent of income earners, less than 10 per cent of homes are affordable. Buyers in Melbourne fare slightly better, with 50 per cent of homes available to up to 80 per cent buyers, though the number of homes for the bottom 40 per cent of income earners is also less than 10 per cent. The sharpest deterioration in affordability seen during the pandemic was in Hobart, where 90 per cent of the houses are affordable to just the top 20 per cent of income earners. According to the ANZ CoreLogic Housing Affordability report released last month, another consequence of booming house prices is the length of time it takes first home buyers to save a deposit. The time it takes to save a house deposit for a household on average income has blown out to a record 10.8 years Australia-wide as prices increase at a rate 8.1 times faster than household income. Home buyers in Sydney are now taking 16.6 years to save a 20 per cent deposit to buy a house – also a record, following a 30.4 per cent rise in prices over the past 12 months. University of Melbourne demography professor Peter McDonald said this was one factor leading to delays in couples having children, which was in turn leading to people have fewer children than in the past. Australia registered 294,369 births in 2020 for a fertility rate of 1.58 babies per woman – a 3.7 per cent fall on the previous year, almost 50 per cent lower than 50 years ago and the lowest rate on record. Daniel Senia, general manager of the First Place Building Company in Victoria which predominantly deals with first home buyers seeking housing packages, said the data reflected what he was seeing on the ground. “We’re seeing a lot of either singles or young couples married; very rarely with kids, maybe one; average age 35–36,” Mr Senia said. “They’re trying to get into the market, and then they’re starting the family.” According to the most recent Bureau of Statistics Housing Occupancy data from 2017-18, the average age of a first home buyer is 35, which is up 3 years on a decade earlier. While births data for 2020 released this week showed the median age for parents is now 31.6 for women and 33.6 for men.
https://www.smh.com.au/politics/fed...els-with-no-end-in-sight-20211228-p59kg1.html Australian households are the second most indebted in the world, according to the IMF, with only Swiss residents owing more. As a share of GDP, Australian household debt is at 123.53 per cent, with Switzerland at 131.9 per cent. Just five other nations – Norway, Canada, Demark, the Netherlands and South Korea – have household debt levels above 100 per cent. Most debt is tied up in mortgages which, due to record low interest rates across the world, are at their most affordable this century. But some central banks have already started lifting interest rates to deal with emerging inflation pressures while banking regulators have raised concerns about the sharp increase in property prices that has occurred in many nations including Australia. While the Reserve Bank has said it will not lift official interest rates until 2024, financial markets and economists believe the RBA will move as early as the middle of next year.
Sleep bus will be sanctuary for Sunshine Coast homeless in housing crisis ABC Sunshine Coast / By Jacqui Street Posted 4 hours ago https://www.abc.net.au/news/2022-01...unshine-coast-during-housing-crisis/100756218 The sleep bus has eight pods with two beds each and toilets for the homeless.(Supplied: Sleepbus) Queensland's first sleep bus has arrived to offer emergency beds to homeless people on the Sunshine Coast, as support agencies struggle to help an avalanche of people caught in the housing crisis. Key points: The Maroochy Neighbourhood Centre raised $200,000 for two sleep buses after a homeless man was killed in 2019 Queensland's first sleep bus will house eight people each night in pods with toilets, air conditioning, wifi and charging stations Charities are seeing an increase in homelessness as rental prices increase The $100,000 bus has been financed from community donations through a campaign that began when homeless man David Collin was killed in his sleeping bag at Maroochydore in 2019. Mark Ellis, the community development coordinator at the Maroochy Neighbourhood Centre, felt compelled to provide safe beds in an area that has no homeless shelter for men. He said although the bus was not a long or even medium-term housing solution, it would give some respite to people in crisis. "Because they're so, so sleep deprived, you know, a few nights' good sleep in a bed, their mental health will improve, which will improve their physical health," Mr Ellis said. 'I'm not a bum' Peter McNeill hopes to be one of the first to sleep in the bus when it opens on January 21. Peter McNeill, who is homeless, says he can't wait to get onboard the bus for a safe night's sleep.(ABC Sunshine Coast: Jacqui Street) Mr McNeill said he had been homeless for nearly five years after quitting his Bunnings job due to ill health. He said Ross River fever from a mosquito bite developed into chronic fatigue, leaving him unable to work for more than an hour or two without needing to lie down. "There's some people out there who think, 'Oh, you're just a bum, but I'm not a bum. You know, I'm not … a well person," he said. Mr McNeill was on the public housing wait list and had been offered rental assistance, but he was unable to find an affordable rental in the current market. He described the bus as "absolutely brilliant" and "a blessing from God". "It'll give me the luxury of feeling safe when I'm sleeping," Mr McNeill said. How it works The Maroochydore bus has eight double pods which can sleep eight single people or more if there are couples or relatives. The sleep pods come with ipads and walkie talkies so guests can communicate with the caretaker onboard.(ABC Sunshine Coast: Jacqui Street) It will be parked in Maroochydore at a council-approved spot, and doors open between 8.30pm and 10.30pm for "onboarding", with wake up from 7am. Sleep buses usually fills their spots on a first-come, first-served basis. The Melbourne founder and chief executive of Sleepbus, Simon Rowe, said dogs would also be allowed. "We have one rule, which is the quiet enjoyment rule. "So, we don't care what your condition is, what you've got with you, a pet, whatever — we just need your name and you can have a quiet night's sleep." Mr Rowe converted the bus himself after it was donated by transport company CDC. The sleep pods have air conditioning, reading lights, USB charging points, a small toilet and even an iPad for sleepers to catch up on TV programs. Simon Rowe fitted the bus with pods and drove it from Melbourne to Maroochydore.(ABC Sunshine Coast: Jacqui Street) Volunteers will be required to clean the bedding, but Mr Rowe said he'd had 50 people signing up wanting to help. The bus will also have a volunteer caretaker who will sleep onboard in another pod. "So, they stay on the front of the bus in their own cabin, it's quite a big cabin, they've got security cameras so they can see what's going on," Mr Rowe said. He said all the guests would also have a little walkie talkie. "So, if they want to communicate, they can do that." Great need The blue bus will be open to anyone who needs a bed, but a pink bus for women has also been ordered and will arrive mid-year. Mark Ellis says he's proud of the sleep bus but wants governments to do more for homeless people.(ABC Sunshine Coast: Jacqui Street) Mr Ellis said the need for emergency housing was continuing to grow in the region, with many unable to afford rent increases. "I had a 73-year-old woman come in on December 22. She had been homeless for four months," he said. "To the department's credit, the next day, she was actually housed because a 73-year-old woman sleeping rough on the street is not on." Mr Ellis said government investment in housing was needed. "I think the federal government needs to actually start looking at it seriously and pump some serious money into it, otherwise … we've got a serious problem as it is but it's going to get even worse." Sleep buses gain momentum The Queensland bus follows others in Melbourne, Canberra and neighbouring Queanbeyan in New South Wales. Mr Ellis said the Maroochydore fundraising efforts had inspired other communities and sleep buses had been ordered for Hervey Bay, Byron Bay and Taree. "I feel like a proud dad really. To see the bus here and having a few of the people that have experienced homelessness coming and having a look at the bus is a great thing."
Rental ‘tragedy’ pricing out essential workers keeping cities running By Kate Burke January 20, 2022 https://www.watoday.com.au/property...s-keeping-cities-running-20220119-p59pd6.html Rents have reached record highs in our biggest cities and many regional areas, leaving lower income earners and essential workers - many of whom keep the country going amid surging coronavirus case numbers - struggling to find affordable rental properties. A comparison of Domain rental data and the latest employee earnings data from the Australian Bureau of Statistics, released on Wednesday, shows not one suburb in NSW or Victoria would be considered affordable for essential workers such as checkout operators, pharmacy sales assistants or kitchen hands. Nurses are among the essential workers who can struggle to find an affordable rental.Credit:Kate Geraghty Child carers, commercial cleaners and packers would also face slim pickings, with the cost of renting a typical home across any Sydney or Melbourne suburb likely to push them into rental stress - defined as when lower-income households put more than 30 per cent of their gross income towards housing costs. Similarly, in Perth and Brisbane, not one suburb recorded a median rent that would be deemed affordable for such workers. Domain recorded median rental asking prices for suburbs with a minimum of 30 rentals over the year to December. Rising rental prices across much of the country - which saw house rents in most capital cities hit record highs in the December quarter - were pushing essential workers further away from workplaces and into poorer quality accommodation, said National Shelter Executive Officer Adrian Pisarski. “I think it’s a tragedy,” Mr Pisarski said. “All those professions on lower incomes or who have missed out on income because of the pandemic are in a genuine crisis, if not a catastrophe. “They have to go for lower standard amenity, and further out, though even that has become more difficult over the pandemic,” he said, noting traditionally more affordable outer suburbs and regional areas had seen upward price pressure as those working from home seek more space. Even the suburbs which recorded the lowest unit rents in NSW and Victoria last year, Birmingham Gardens in Newcastle (with a weekly median of $175) and Moe ($205) in Victoria’s Gippsland region, would tip a sales assistant into rental stress - based on the ABS figures on average weekly total cash earnings in May 2021. Figures show nursing support or personal care workers, limited at spending $256 per week or 30 per cent of their earnings, could only afford to rent a typical unit in one Melbourne suburb, MacLeod ($245),14 kilometres north-east of the city. In Sydney, South Granville ($260), 18 kilometres west of the CBD, was the only suburb with a median unit rent to come close to the $259 limit that would stop aged or disabled carers going into rental stress. Dual income households obviously have more choice, though it would still be a challenge to find an affordable rental for those on lower wages - with a growing number of suburbs slipping out of reach. For instance, a nursing support worker and a commercial cleaner on combined weekly earnings of about $1525 - limiting them to less than $460 for rent per week - could look to a unit in Dulwich Hill ($450) in Sydney’s inner west, or a house in Scoresby ($450) in Melbourne’s outer east. However, renting a typical house in the likes of Umina Beach ($495) on the Central Coast, Claremont Meadows ($500) in Sydney’s west and Rye ($500) on the Mornington Peninsula - which were all in reach back in 2020 - would now place such a couple in rental stress. Other key workers also have more options, though many are still limited to the middle and outer suburbs if renting on their own – which is an option many cannot afford. A bus driver with a maximum budget of $353 per week could get a median priced unit in Liverpool ($350) in Sydney’s south-west, or a house in St Albans ($353) in Melbourne’s north-west. Social workers and registered nurses would need rentals costing less than $440 per week, with units in Sydney’s Gladesville ($425) and houses in Beaconsfield ($435), 44 kilometres south-east of the Melbourne CBD, close to their 30 per cent threshold. Primary school teachers could spend up to $477, just getting them into a typical apartment in Crows Nest ($475) on Sydney’s north shore or a house in Burwood East ($475) in Melbourne’s outer east. Greater Melbourne’s median house rent of $445 would also be affordable. Nicole Gurran, a professor of urban planning at the University of Sydney, said poor housing affordability meant a not insignificant proportion of key workers were living in overcrowded conditions, which had become a significant risk factor during the pandemic, as it made it more difficult for key workers - who typically cannot work from home - to isolate if they caught COVID-19. “We know the trade-offs people make in an unaffordable rental market, either to live in inappropriate housing or to suffer a really high rental burden and often, unfortunately, it’s both,” Professor Gurran said, noting that moving further afield also increased the cost and time to commute to work, and could be harder for shift workers who could not rely on public transport. On top of unaffordable rents, there was the difficulty of even being able to secure a property in the first place, with rental vacancy rates falling last year, and “heartbreaking” numbers of people seen competing for cheaper housing late last year, she said. Farah Farouque, director of community engagement at Tenants Victoria, said there was a real mismatch between where affordable homes were located and where the bulk of jobs were. In addition to concerns about overcrowding, she noted there were reports of priced-out hospitality workers camping along the state’s surf coast, unable to keep up with rapidly climbing demand and rents during the pandemic. Primary school teachers on the median income could look to rent units in suburbs like Hornsby and Enfield in Sydney. Ms Farouque said tenants were entering year three of the pandemic with less support, despite ongoing financial pressure and the surge in coronavirus cases. While the Victorian government’s commercial tenancy relief scheme had been extended until March, applications closed this week for rent relief grants to support residential tenancies. Applications for the NSW government’s residential tenancy support package have also closed, while commercial support continues, and the federal government’s pandemic leave disaster payment has been reduced. The pandemic has shown how dependent we are on the labour of essential workers, all three experts said, and highlighted the critical need to increase access to affordable housing close to jobs, public transport, schools and other amenities, rather than leaving key workers increasingly facing rental stress. Increasing investment in social housing, boosting Commonwealth rent assistance and providing stronger protections and security for renters - as more Australians rent for longer - were also key, Professor Gurran added. Her comments were echoed by Mr Pisarski, who also noted the need for tax reform, expressing disappointment that the Labor government had walked away from previous election policies to scrap negative gearing and make changes to the capital gains tax. Insufficient supply of social and affordable rental housing was seeing more demand from lower-income workers in the private rental market, he added, while rapidly rising prices also meant more aspiring homeowners were also renting for longer - also often competing for cheaper properties while they saved for a deposit. “[This means] those key workers … or anybody really earning under $60,000 a year in any industry is going to be squeezed,” he said.