Outside of my scope of interest, but this came up frequently when searching Google. Only in AustraliaThe History, Politics, and Economics of Australian Exceptionalism, William Coleman
The article below is 10 months old. Labor's backflip on negative gearing policy a benefit to the wealthy By David Paull | 11 August 2021 Labor's dumping of its negative gearing reversal has aligned the Party more with Liberal policies (Image by Dan Jensen) With Labor’s reversal of policy regarding negative gearing, it has aligned itself with the ranks of the most powerful property rights lobby group in Australia and with the religious ideas of John Howard and Scott Morrison. Australia’s foremost lobby group which represents property developers and investors across the country is the Property Council of Australia (PCA). Initially, it was known as the Building Owners and Managers’ Association of Australia (BOMA), forming as a lobby group way back in 1966. It assumed its current name in 1996, the year John Howard took office as Prime Minister. The concept of negative gearing has been around in some form for a long time. Bob Hawke abolished it in 1985, though re-introduced it in 1987 for the stated reasons of increasing the supply of housing while keeping rents down. But rather than this outcome, it turned out negative gearing only encouraged many to undertake a speculative buy-up of the housing market. Despite Hawke’s claims, all this ended up doing was to reduce housing affordability and increase the wealth of the largest speculators by creating a tax loophole. In 1999, the Howard Government exacerbated the situation by removing any limitations on negative gearing and by changing the capital gains regime to offer a 50 per cent discount. This opened the gate to investors to run investment properties at a loss, claiming that loss off their taxable income, then selling the property for a profit. In 2011, it was estimated that this tax loophole had cost the Government around $5 billion a year in foregone income tax revenue — in 2015, it was estimated to be about $11.7 billion. Who knows what it is now? Despite the spin that came from the Howard Government, it was clear the main beneficiaries are not “mums and dads”, but the biggest land investors and agents and those who pocket the cash from the inflated property prices. The more property you own, the more you can write off and the better you are. With the emphasis on existing property investment, builders of new estates were also able to benefit from the high land prices. All good in Howard’s individualist world of “survival of the fittest” and the sanctity of private property. Conservative notions of private property and freedom from government interference is not new in this country. Similar concepts go as far back as the 1830s when licenses to “depasture” were being issued by the Crown to squatters outside the official colony boundaries. Even though these were Crown leases, these mostly city-based land speculators began a campaign to assert their property rights. These squatters clung to the ideas of “individualism”, best expressed by the Christian writer, James Elishama Smith, who viewed the sanctity of individuals and their right to amass property to fulfil one’s happiness. This was often expressed in colonial times as the right to have sovereign ownership over lands on which you toiled. Such quasi-religious notions also fuelled the squatter’s mindset to maintain a war against the original owners of the country, fuelling the horrific massacres of the late 1830s-50s throughout the colony. These ideas became the bedrock of modern conservative concepts of property, which Howard embodied fully, as he did in his reluctance to acknowledge the rights of Indigenous people to land. But in order to maintain the illusion that negative gearing is of benefit to the country, the PCA conducts lobbying on a scale second to none. Its budgets in 2015 were reported as including $6.4 million for advocacy, $1 million for communications and $7.2 million for “networking”. It commissioned a major television campaign, ‘Don't Play With Property’, ahead of the 2016 Federal Election, seeking to prevent any possible watering down of the negative gearing/capital gains tax regime from a Labor government. The PCA has campaigned on a range of property rights issues, including opposing land tax increases, reducing stamp duty, opposing minimum apartment standards, rorting strata title, supporting foreign property purchasers and lastly, opposing land-clearing restrictions. The latter was a welcome policy approach for the big agricultural exporters and property developers who have largely achieved their goals of removing restrictions to private land management, now through a cloak of “self-assessment” in New South Wales, for example. The major funders of the PCA appear to be the corporate leader membership group. They represent the biggest ‘property owners and development companies with assets exceeding $3 billion’. According to the PCA website, ‘they play a central role influencing the sector and helping set the Property Council’s advocacy priorities’ and include such players as LendLease, Mirvac and Stockland. There are many other contributors who comprise the membership of the PCA. The property sector has a lot of influence on our political system and is one of the biggest political donors to political parties. Between 1998 and 2020, it has given over $103 million in donations and “other receipts” to all parties, $43 million to Labor and nearly $60 million to the various LNP entities. Most of the heavy lifting on this front is done by the various corporations, with the PCA itself donating a modest sum of $290,000 to the LNP since 1998. The foreign-owned Lendlease has donated twice this amount. What few today know is that our Prime Minister, Scott Morrison, was the organisation's national policy and research manager from 1989 to 1995, perhaps his first real job. This was a crucial period in the lobbying effort by the property/development sector while Labor was in power, also while Howard was the shadow Treasurer. It is likely that Morrison was being groomed as Howard’s property rights prodigy; it certainly seems they share similar religious views on the sanctity of the few to prosper. Morrison used this issue to provide some of his first spin-doctored messages to the public as a minister. Despite the fact that analysis by many, such as the Grattan Institute, consistently found that negative gearing in Australia provides a greater benefit to wealthier Australians than the less wealthy, Morrison as Treasurer, in defence of negative gearing, cited tax data showing that numerous middle-income groups (such as teachers, nurses and electricians) benefit in larger numbers from negative gearing. Yes, many middle-income people have made property investments, but who makes the most money? And so, we come to the present with Labor’s backdown on reversing this considerable inequity, a block to homeownership for many and a mechanism by which the big players amass more wealth. Just as Governor Gipps left the colony broken by the will of the wealthy landed elites, has Labor joined the ranks of the same elites who seek to trample on a fairer society in which the dream of homeownership is still available to the majority? Or is the allure of all that cash into party coffers and claims of political expediency too great? Let us hope their opposition to negative gearing hasn’t been shelved for good.
Pork-barrelling at an ‘industrial scale’ in NSW, ICAC forum told By Tom Rabe June 3, 2022 https://www.smh.com.au/national/nsw...e-in-nsw-icac-forum-told-20220603-p5aqxf.html An infamous Berejiklian government grants scheme that resulted in millions of dollars flowing mostly to Coalition electorates has been described by the head of the NSW corruption watchdog as blatant, politically motivated pork-barrelling. Independent Commission Against Corruption chief commissioner Peter Hall said the $250 million Stronger Communities fund had clearly crossed “the line”, while another legal expert said the process was an “appalling” indictment on the integrity of the NSW government. ICAC Chief Commissioner Peter Hall hosted a special public forum on pork-barrelling on Friday.Credit:Janie Barrett Hall said he believed there needed to be a tightening of pork-barrelling laws. A host of legal and government experts examined the use of pork-barrelling in NSW as part of an ICAC-convened forum on Friday, and discussed whether the process – once accepted and even celebrated by state ministers – should even be considered legal, as it currently is. The forum heard that pork-barrelling, the process of targeting specific electorates with taxpayer cash for a political outcome, had reached an “industrial scale” in recent years. “What’s been exposed ... is pork-barrelling, and I’m quite happy to accept the pejorative definition of that, on an industrial scale,” Griffith University Professor A.J. Brown said. “This system-wide, government-wide industrial-scale pork-barrelling is where we’ve clearly seen the evidence that we’ve gone way down a slippery slope that the public is recognising is causing enormous concern.” The forum did not look at the specific conduct of any individuals, and the papers provided to the forum were not aimed at specific instances. Hall referenced the findings of an NSW auditor-general’s report into the Stronger Communities grants when suggesting its sole motive was political, rather than for the benefit of the community. “The auditor-general’s report discovered, in that case, a document which is a briefing note in the premier’s office, and that briefing note was to the effect ‘we’ve got the money out the door, and it’s hitting the political target’. You couldn’t have been clearer than that,” he said. “So that was, you’d almost say, the sole motive, sole purpose of that exercise was political or electoral and that’s clearly on the other side of the line.” The ICAC is preparing to conduct its own investigation into the process of pork barrelling in NSW, including “whether and how it relates to corrupt conduct”. Constitutional law professor Anne Twomey, who wrote a paper on the matter at the ICAC’s request, said she had been appalled by the state government’s Stronger Communities Scheme. “It was appalling on two levels. One, it was an indictment in the integrity of governmental behaviour, but secondly – I say this as a former public servant – it was appalling, just in terms of terrible public administration,” she told the hearing. “Like many people I have been infuriated by ministers at both the state and the federal level, asserting that they have an unfettered ministerial power, and that there’s nothing illegal or corrupt about pork-barrelling. In my view both propositions are wrong.” Twomey went on to criticise the current NSW ministerial code of conduct, which she described as “frankly useless”. “They are deliberately written to allow as much misbehaviour as you can possibly get away with,” she said. Twomey said, in some circumstances, pork-barrelling could already be considered corruption or even criminal corruption and would fall within the ICAC’s purview. “Most voters, I think, are fed up with election bribes and the whiff of low-level corruption that they exude, which corrodes public trust in the system of government.” Former premier Gladys Berejiklian and former deputy premier John Barilaro were previously open about the occurrence of forms of pork-barrelling. Berejiklian told a parliamentary inquiry into the Stronger Communities Fund: “Governments in all positions make commitments to the community in order to curry favour. I think that’s part of the political process whether we like it or not.” Ms Berejiklian has maintained that, while she was “consulted and advised” on the council program, ultimate responsibility lay with the Office of Local Government.
Ms Berejiklian resigned as Premier last year after the state’s ICAC revealed she was under investigation over whether she breached public trust over grants in the Wagga Wagga seat of then-secret boyfriend Daryl Maguire. Scott Morrison (the ex prime minister, pentecostal church bs artist, now booted out last federal election) thought she was a fantastic premier. Australian politicians, corrupt to the eyeballs, most have a religous bent. They wouldn't keep a job in the private sector for 5 minutes due to their incompetence.
Rate rises could hit renters harder than home owners By Sue Williams June 13, 2022 https://www.smh.com.au/property/new...-harder-than-home-owners-20220610-p5asvh.html Key points Renters already face a dire shortage of accommodation, with vacancies at rock bottom levels. Now it’s predicted that many investors will try to pass onto them all, or some, of the extra cost of having a mortgage. Domain’s chief of research & economics Dr Nicola Powell says the extent to which renters could be slammed depends on the vacancy rate in their particular location and the circumstances of their landlord. In one of the current housing market’s worst ironies, the people likely to be slugged hardest by the latest interest rate increase are those who don’t actually own property. Renters already face a dire shortage of accommodation, with vacancies at rock-bottom levels, and now it’s predicted that many investors will try to pass onto them all, or some, of the extra cost of having a mortgage. The recent Domain Rental Vacancy Rate Report showed that residential rental vacancies are currently at crisis levels.Credit: “The Reserve Bank’s interest rate rise will have an impact on renters,” AMP Capital chief economist Shane Oliver said. “As the cost of buying a home goes up for an owner or investor, they may try to pass that on to their tenants. It might not be the full amount of the increase, but it could be a big chunk. “With market conditions so tight, and vacancy rates so low, tenants may not have too many other alternative properties to rent or, if they’d been saving up for a deposit, then it’s now going to be harder for them to buy. And, in the longer term, the higher rate could lead to a fall in the property market and less construction, which could tighten the rental market even further.” Last week the RBA lifted the cash rate by 50 basis points to 0.85 per cent in its second rise in two months, with more predicted to follow in a bid to slow the rapid rate of inflation. According to RateCity, a home owner with $1 million owing will see their mortgage repayments rise by $265 a month. If the cash rate hits 2.10 per cent by the end of this year, as many economists are now forecasting, someone with a $1 million mortgage could see repayments rise by a total of $1083 by the end of this year. RateCity research director Sally Tindall said in those areas where there are already shortages of rental accommodation, tenants may find themselves “throwing more money at rents” to keep their homes. “I think they could find their rents going up as a result of the rate rise, particularly in areas of Sydney or Melbourne or anywhere across Australia where the rental situation is dire,” she said. “If you factor in the borders reopening too, that could further fuel demand for rental places, and we might see more investors moving their properties away from residential tenancies and back to short-term platforms like Airbnb as tourists come back. It means investors may have more room to increase rents as a result.” The prospect of more rate rises on the horizon could also spur some investors to sell, and to deter others from entering the market. The latest Australian Bureau of Statistics figures for April showed the biggest drop in investor lending since May 2020. The recent Domain Rental Vacancy Rate Report showed that residential rental vacancies are currently at crisis levels, ranging from 1.6 per cent in Melbourne and 1.4 per cent in Sydney, to 0.6 per cent in Brisbane and 0.3 per cent in Adelaide. Domain chief of research and economics Dr Nicola Powell says the extent to which renters could be slammed depends on the vacancy rate in their particular location and the circumstances of their landlord. “If the investor needs the cash flow to replay their mortgage, they may be very sensitive to rate rises and want to pass on the extra costs,” she said. “But if they’re already negatively geared, then they might not be so fazed by the rise. Sydney’s vacancy rate is currently 1.4 per cent. Credit: “Certainly, those tenants who are coming to the end of their leases will be at greater vulnerability to higher rents.” Reports are coming in all the time, however, about tenants being evicted so that landlords can raise rents, according to Tenants Union of NSW chief executive Leo Patterson Ross. “If landlords think they can get higher rents, we’re seeing a lot of tenants being evicted,” he said. “Or if tenants don’t have any rental alternatives, then they might see their landlord passing on the higher rate of interest and paying it. “Landlords always do risk losing a good tenant in that way, though, and sometimes the value of the rent rise can be wiped out by the period their rental is then vacant.” BIS Oxford Economics head of macroeconomic forecasting Sean Langcake says landlords pushing rents up may not always succeed but the difficulty is that the rental market isn’t terribly transparent. “The interest rate is just one factor in determining rents but it can be very hard for tenants to know if they’re being offered a good deal,” he said. “And if the rise is too much, they still often don’t know if they could find a better rent elsewhere.”
https://www.afr.com/property/residential/global-housing-bubbles-are-bursting-20220622-p5avp3 Housing bubbles are bursting around the world As central banks raise interest rates around the world, once-hot residential real estate markets in many nations are suddenly turning cold. Enda Curran Jun 22, 2022 A world economy already contending with raging inflation, stock-market turmoil and a gruelling war is facing yet another threat: the unravelling of a massive housing boom. As central banks around the globe rapidly increase interest rates, soaring borrowing costs mean people who were already stretching to buy property are finally reaching their limits. The effects are being seen in countries such as Canada, the US and New Zealand, where once-hot residential real estate markets have suddenly turned cold. The construction frenzy in cities such as Wellington in New Zealand is slowing down. Bloomberg It’s a sharp reversal from years of surging prices fuelled by rock-bottom mortgage rates and government stimulus, along with a pandemic that popularised remote work and sent homebuyers on the hunt for bigger spaces. An analysis by Bloomberg Economics shows that 19 OECD countries have combined price-to-rent and home price-to-income ratios that are higher today than they were ahead of the 2008 financial crisis – an indication that prices have moved out of line with fundamentals. Taming frothy home prices are a key part of many policymakers’ goals as they seek to quell the fastest inflation in decades. But as markets shudder from the prospects of a global recession, a slowdown in housing could create a ripple effect that would deepen an economic slump. Falling home prices would erode household wealth, dent consumer confidence and potentially curb future development. And property construction and sales are huge multipliers of economic activity around the world. “The danger is business and financial cycles turning down simultaneously, which can lead to longer-lasting recessions,” said Rob Subbaraman, head of global markets research at Nomura Holdings Inc. “A decade of quantitative easing has fuelled frothy housing markets and we could be entering the other side of this soon, as housing affordability is stretched and debt-service ratios could rise sharply.” Such a scenario would gum up bank lending as the risk of bad loans increases, choking the flow of credit that economies thrive on. In the US and Western Europe, the housing crash that precipitated the financial crisis hobbled banking systems, governments and consumers for years. To be sure, a 2008-style collapse is unlikely. Lenders have tightened standards, household savings are still robust and many countries still have housing shortages. Labour markets are also strong, providing an important buffer. “Lower prices will have a direct effect on consumer spending and the whole economy, as typically real estate makes up a significant part of households’ wealth,” said Tuuli McCully, head of Asia-Pacific economics at Scotiabank. “Nevertheless, as household balance sheets in many major markets remain healthy, I am not particularly worried about risks related to house prices and the world economy.” Still, the risk of a sharp drop in prices is clearly greater when there’s a synchronised global tightening of monetary policy, said Niraj Shah of Bloomberg Economics in London. Apartments under construction in Montreal. The housing market in advanced economies such as Australia, Canada and the US are at risk of a correction. Bloomberg More than 50 central banks have raised interest rates by at least 50 basis points in one go this year, with more hikes expected. In the US, the Federal Reserve last week boosted its main interest rate by 75 basis points, its biggest increase since 1994. Housing markets in New Zealand, the Czech Republic, Australia and Canada rank among the world’s bubbliest and are particularly vulnerable to falling prices, according to Bloomberg Economics. Portugal is especially at risk in the euro area, while Austria, Germany and the Netherlands also are looking frothy. In Asia, South Korea house prices also look vulnerable, according to an analysis by S&P Global Ratings. That report noted risks from household credit relative to nominal GDP, the growth rate of household debt and the speed of house-price gains. Elsewhere in Europe, Sweden has seen a dramatic turnaround in housing demand, sparking concern in a country where debt runs at 200 per cent of household income. Goldman Sachs Group economists wrote in a report last week that the signals from home sales typically precede prices by about six months, indicating that several countries are likely to see further declines in values. A substantial cooldown in housing markets is an important reason why developed economies will likely slow, according to the economists led by Jan Hatzius. “The very rapid deterioration in affordability and large drops in home sales suggest that a hard landing is a meaningful risk, especially in New Zealand, Canada, and Australia, although that is not our baseline given current tightness,” the Goldman economists wrote. Central banks are issuing warnings of their own. The Bank of Canada said this month in its annual review of the financial system that high levels of mortgage debt are of particular concern as interest rates rise and more borrowers are strained to pay bills. The Reserve Bank of New Zealand’s semi-annual Financial Stability Report said that the overall threat to the financial system is limited, but a “sharp” decline in house prices is possible, which could significantly reduce wealth and lead to a contraction in consumer spending. “As borrowing costs rise, real estate markets face a critical test,” Bloomberg’s Shah said. “If central bankers act too aggressively, they could sow the seeds of the next crisis.” Here is what’s unfolding in bubbly housing markets around the world. New Zealand If 2021 was the year New Zealand’s house-price growth reached dizzying heights, with an annual increase of close to 30 per cent, 2022 is shaping up to be the year the music stops – and the abrupt change has left people scrambling. In March, Jonathan Milne decided it was time to sell a family home in the Auckland suburb of Onehunga and purchase a larger house nearby for $NZ2 million ($1.8 million). He and his wife, Georgie, were optimistic of a speedy sale and a good price for their old home, which was valued by the local government at $NZ1.8 million. All that changed in April when the RBNZ took aggressive action to tackle inflation, hiking the official rate by 50 basis points to 1.5 per cent – its biggest increase in 22 years. It quickly followed with another 50-basis-point jump in May and a projection for the rate to peak at close to 4 per cent next year. Milne’s house was meant to be sold in May via auction, a popular method of home sales in New Zealand, but not a single bidder showed up for the event. “What we didn’t anticipate was that it would be so hard to market and sell our house,” said Milne, the 47-year-old managing editor of a news website. “We knew that every week that passed would knock another $NZ100,000 off the price.” At the end of last month, they accepted an offer that Milne described as “dramatically” below the government valuation. Economists expect New Zealand house prices will fall about 10 per cent this year and may eventually drop as much as 20 per cent from their late 2021 peak. While for many homeowners that’s a small decline compared with the massive equity gains in recent years, there likely will be broader effects. ANZ Bank forecasts subdued consumer spending due to a mixture of people feeling poorer because of falling house prices, the impact of higher rates on cash flow, as well as higher food and energy prices, according to Sharon Zollner, the bank’s New Zealand chief economist. “There are going to be house buyers who have just entered the market in the last year or so who started off with a mortgage rate of 2.5 per cent and all of a sudden they are rolling off on to a mortgage rate closer to 6 per cent,” said Jarrod Kerr, chief economist at Kiwibank in Auckland. “There is going to be some pain for sure.” Canada The housing market in Canada has turned so fast some buyers are losing money on their properties before the sales even close. “People are actively trying to get out of deals,” said Mark Morris, a Toronto-based real estate lawyer who cited one example where a property’s assessed value came in $C200,000 ($222,400) less than the purchase price agreed to only a couple months before. That left the buyer willing to give up their $C100,000 deposit to avoid closing, he said. “I’m called several times a day by various people who feel that they’ve paid too much.” Such cases are cropping up after Canada posted its first national home-price decline in two years in April, followed by another drop in May. Though so far the pain has been concentrated around the markets which saw the biggest pandemic run-ups – Toronto and its surrounding regions – the strains are already starting to spread to formerly hot markets around Vancouver too. Like in other countries, the turmoil in Canada’s housing market is being caused by an aggressive campaign to raise interest rates by the central bank. The benchmark has already gone from 0.25 per cent at the beginning of the year to 1.5 per cent today. With even higher rates expected, some economists say home prices could fall as much as 20 per cent in the hottest markets. It’s a drastic change in a country that saw prices rise by more than 50 per cent over the two years since the pandemic started. With prices rapidly outpacing wage growth, some buyers’ hope of entering the market came from low rates that are now jumping. US Mabel Melendi could tell the housing market in Cape Coral, Florida, was slowing after a week went by and she still hadn’t received any inquiries or offers on a newly constructed home she listed in mid-April. Just three months ago, she received a bid on a similar property within three days of putting it on the market. But after three price cuts – knocking the asking price down to $425,000 from $510,000 – and more than two months after the initial listing, she was still looking for buyers in mid-June. One offer that came in over Memorial Day weekend fell through after the buyer couldn’t qualify for a large enough mortgage. “Most of the people don’t qualify for what they used to qualify for before,” Melendi said. Mortgage rates have increased this year at the fastest pace in records dating back a half-century, according to Freddie Mac. The average rate for a 30-year loan reached 5.78 per cent last week, the highest since 2008. That’s led to price cuts for both builders and existing-home sellers as demand rapidly cools. Almost 20 per cent of US home sellers cut prices in the four-week period ended May 22, the most since October 2019, according to the brokerage Redfin Corp. The share was higher in some markets that became hot destinations during the pandemic for people seeking more affordably priced homes. In Boise, Idaho, for example, 41 per cent of sellers dropped prices in April. In Cape Coral, it was about one in three. Sellers are realising that prices may not keep rising at the same pace they previously did as buyers are increasingly squeezed, said Daryl Fairweather, Redfin’s chief economist. “Prices are going to have to come down to match demand.” After rising by an estimated 18 per cent in 2021, US single-family home prices are forecast to grow by a more moderate pace of 10 per cent in 2022 and 5 per cent in 2023, according to Freddie Mac. ”It’s a pretty significant slowdown, but coming from scorching-hot house-price growth,” said Len Kiefer, the company’s deputy chief economist. A shortage of homes for sale and pent-up demand from people seeking more space – along with millennial buyers getting older and starting families – means prices nationally should still trend higher, he said. Still, the effects of slowing demand are reverberating through the real estate industry: Redfin and Compass Inc. said last week that they will lay off employees after the sudden cooldown in the market. UK The UK housing market is starting to slow after two years of historic growth. As part of pandemic measures, homebuyers were exempt from a stamp tax duty on properties valued at up to £500,000 ($882,430) between July 2020 and June of last year, sending prices escalating even further and making housing “seemingly detached from the rest of the economy,” said Tom Bill, head of UK residential research at Knight Frank. Now, the Bank of England has increased rates five times in recent months, with more hikes expected to come. That may portend a cooldown in real estate for the rest of the year, with more supply becoming available as homeowners rush to beat declines in values, Bill said. Already, approvals for new home loans have dropped to the lowest in almost two years. Buyer inquiries fell in May after gaining for eight straight months, according to a survey from the Royal Institution of Chartered Surveyors. Still, areas such as prime London are faring well, Bill said, as foreign investors flock to the international destination and students return following the pandemic. Secondary cities such as Birmingham, Liverpool and Manchester are seeing their prices grow even faster than in the capital. “As long as the UK is seen as a country with a rule of law, good schools, and the respect of private property, money will always flow in,” Bill said. Additional reporting: Ainsley Thomson, Ari Altstedter, Jonnelle Marte and Alice Kantor — Bloomberg Wealth
Lack of affordable housing set to cost Australia $25b a year By Josh Gordon June 23, 2022 https://www.smh.com.au/national/aus...-suspension-to-be-lifted-20220622-p5avtl.html Businesses are increasingly struggling to find and retain workers who can afford to live within an acceptable commuting range, with a major new study warning a chronic lack of affordable housing is set to cost taxpayers $25 billion a year if nothing is done. Some businesses have even taken matters into their own hands, offering the option of low-cost accommodation to lure workers unwilling to brave the long daily commute. Housing affordability is a major challenge for buyers and renters.Credit:Jason South The study, by public policy consultants SGS Economics and Planning, found decades of under-investment had triggered a collapse in the proportion of the housing stock regarded as affordable. Social housing – a catch-all phrase covering public housing and other forms of subsidised or lower-cost housing – now makes up just 4 per cent of national housing stock, a record low, and down from 6 per cent in 1996. It warned if the current trend continues, more than 2 million households that are privately renting will hit the internationally recognised benchmark for housing stress by 2051, under which housing costs soak up at least 30 per cent of a household’s income. That would represent as much as 14 per cent of the total population (assuming an expected population of 37.4 million people in 2051 and an average household size of 2.6 people). That would leave taxpayers facing an annual bill of $25 billion by 2051, chalked up through higher spending on health and mental health services, domestic violence services, lost educational opportunities and increased anti-social behaviour, as well as significant productivity losses for businesses and workers. “This churn is costly both for the employer and employee, and labour market productivity suffers,” the report said. “Education outcomes for children in lower-income households forced to regularly move due to housing costs can be compromised. Lack of secure housing and a stable home environment can foster anti-social behaviour and criminal activity, triggering expensive government interventions in the policing and justice system.” The report was commissioned by Housing All Australians (HAA), a group of business figures and academics claiming housing affordability should not only be regarded as a major social problem but also an economic one. Teachers, nurses, police, single parents and older singles will be able to buy their first home, under a NSW government housing scheme. HAA founder and director Rob Pradolin, a former property developer, said the lack of affordable housing wasn’t just a serious issue for low-income households. He said it had become a major economic issue for businesses struggling to attract workers within commuting range. “We are already hearing of businesses struggling to keep their doors open because the rising rental prices for housing are pushing their staff further out until they are beyond a reasonable commuting range.” He said businesses were already having to invest in affordable housing to provide cheap accommodation to attract staff, particularly in regional and coastal areas that have experienced significant population shifts. Graeme Samuel, Monash University Business School professor and former Australian Competition and Consumer Commission chairman, has also thrown his weight behind the push. Former ACCC chairman Graeme Samuel said the lack of affordable housing is an issue of great significance to the business sector.Credit:Alex Ellinghausen “The business sector has a long history of engaging with governments to address policy sticking points, most recently during the pandemic,” he said. “The lack of affordable housing is an issue of equal if not greater significance to the business sector given this is a problem that is only going to get worse without a nationally co-ordinated response at the highest levels of government and industry.” The consortium behind the $120 million Hotel Continental redevelopment on the Mornington Peninsula in Sorrento, made up of the Trenerry Property Group, Victor Smorgon Group and the Kanat Group, has spent about $10 million converting a nearby vacant aged care facility into low-cost accommodation for hotel workers. Robert Dicintio, director at Trenerry Property Group, told The Age and the Herald that about half of the rooms at the 77-bed facility would be used to accommodate the hotel staff to a three-star standard, costing them about $40 a night. The other half of the building will be used to provide low-cost accommodation for the local area. An artist’s impression of the InterContinental Sorrento, which will include affordable accommodation for hotel workers.Credit: Dicintio said a three-hour daily commute from Melbourne was “just not viable”, creating the risk of staffing shortages, particularly during peak periods of the year. “The problem is grave,” Dicintio said. “Because the value of the real estate on the peninsula has grown so significantly and that combined with the increase in rental costs in the area ... we basically started looking into the opportunities to develop affordable accommodation for ourselves.” The report estimated it would cost about $55 billion to bridge the gap between “affordable rent” (below 30 per cent of household income) and market rents. But it said the benefits would be worth about $110 billion, accrued through health cost savings, reduced domestic violence, reduced crime, better education outcomes and higher productivity. That means tackling the lack of affordable rental accommodation would produce $2 of benefits for every $1 spent – a much higher rate of return than many infrastructure projects. The budget savings would be $7.8 billion over 30 years in Victoria, compared to $2.2 billion and $5.4 billion in Queensland. Economist Brian Haratsis said the shortage of affordable housing would only get worse as Australia opens up to international workers to fill current job vacancies. “Yes, we need more overseas labour, but where will these workers live? Businesses will find it difficult to attract staff if they can’t find a place to live and if they can’t afford the rent where there is available stock,” Haratsis said.
Alarm sounded over elder homelessness amid soaring rents By Caitlin Fitzsimmons June 26, 2022 https://www.smh.com.au/national/nsw...sness-amid-soaring-rents-20220621-p5avet.html The housing affordability crisis is the biggest driver of older people falling into homelessness, ahead of family violence and mental illness, and the problem is getting worse. That is the common theme in submissions to the NSW parliamentary inquiry on homelessness among older people aged over 55. Pauline West fell into homelessness when she became too sick to work.Credit:SMH Housing for the Aged Action Group chief executive Fiona York said she expected the problem of homelessness among older people would have worsened since the 2016 census, given the “ridiculous state of the rental market”. “If you’re a single person on the pension, you’re spending 80 to 90 per cent of your income on rent, so if you’re living in the private rental market at the moment, you’re very likely to be at risk of homelessness,” York said. “For that reason alone, there’s likely to be an increase, and we also know that there’s been neglect of the public and community housing sector from successive governments over many years, which means that the options are very limited for older people.” In the 2016 census, the number of homeless people aged 55 years and over increased for the third census in a row. Older women were the fastest-growing group of homeless people, though this was off a low base. The 2021 census will be released in stages, starting later this month, but the main homelessness figures are not scheduled until next year. Australian Health & Welfare Institute figures suggest people over 55 made up 6.4 per cent of those accessing specialist homelessness services in NSW in 2020-21, but 31 requests for assistance went unmet each day. In its submission to the parliamentary inquiry, the Ageing on the Edge NSW Coalition (which includes the Housing for the Aged Action Group) said this was probably a “gross underestimate because many older people do not identify as experiencing homelessness, do not disclose their housing situation due to shame and stigma, and therefore do not access mainstream housing and homelessness services”. The coalition is calling on the NSW government to fund a specialist older person’s housing information and support service, lower the priority age for social housing eligibility from 80 as a matter of urgency, and build 5000 social and affordable homes per year for 10 years, at least 1000 of which should be dedicated to older people. “The housing insecurity that they now experience is what’s causing their mental health issues in older age, not the other way around.” Housing for the Aged Action Group CEO Fiona York While mental health problems are a known cause of homelessness, especially among the population of rough sleepers, York said for older people experiencing homelessness for the first time, it was often the other way around. “The housing insecurity that they now experience is what’s causing their mental health issues in older age, not the other way around,” York said. The submission from specialist homelessness service and community housing provider Link Wentworth in Greater Sydney says other reasons for the rise include homes that are inappropriate or unsafe for the older person’s needs, discrimination in the private rental market, digital illiteracy and the end of paper applications for housing, and inadequate Commonwealth rent assistance and age pension. Link Wentworth called for the state government to mitigate the loss of thousands of affordable housing properties caused by the end of the National Rental Affordability Scheme. In its submission, CatholicCare Wilcannia-Forbes wrote that it was consistently dealing with case numbers 2.5 times the funded levels. In the financial year to date, it had helped 71 people aged over 55, a 22 per cent increase from the same period last year. Jodie Harrison, Labor MP for Charlestown, near Newcastle, wrote her submission jointly with Our Backyard, a voluntary homelessness service under Macquarie Care. Our Backyard had received a steady increase in people over 55 seeking accommodation, especially people with pets who were adamant that the animals were essential to their emotional and mental wellbeing. The main reason people came to Our Backyard was a lack of affordable housing, followed by family violence and mental illness. In one case Jenny, a 75-year-old woman with two small dogs, signed a lease with a flatmate and then was forced to flee and live in her car because the flatmate became violent towards her. She continued to pay her share of the rent, but the lease was eventually terminated because of rental arrears. Trying to access homelessness services was a “nightmare” process that involved telling her story multiple times, while sleeping in her car left her with serious physical health issues. In another case, a woman in her 50s on a full-time wage as an aged care worker was unable to secure a private rental that was affordable to her. From poor health to homelessness Pauline West, 69, from the Illawarra region, was working in disability and aged care until she was diagnosed with lung disease at 64 and told she was unfit to work. West was not eligible for the age pension until 65 1/2 and was told there was no point in applying for the disability pension because the age pension would come through faster, so she went on unemployment benefits and was forced to go through the charade of applying for three jobs a week. Pauline West said people tried to take advantage of her when she was at a low ebb.Credit:SMH “I started selling my possessions to pay for the rent because I had petrol to buy, medication to buy, food, rent and the unemployment benefit just wasn’t enough,” West said. “I sold jewellery, I sold my DVD player, CD player, stereo system, clothes, shoes, bags, you name it.” West wound up couch-surfing with friends and her mental health deteriorated as she ruminated on what had gone wrong to wind up in that situation. West said when she was at a low point, she was sitting near the water at Shellharbour, and a man who walked his dogs there every day stopped to chat. He said he would give her accommodation on the basis that “you scratch my back, and I’ll scratch yours”. West said: “I’ve been sexually abused as a child, I’ve gone through horrific things in my life, and here I am at the end of my life thinking ‘still?’ “I started selling my possessions to pay for the rent ... the unemployment benefit just wasn’t enough.” Pauline West “People are [still] looking at me and speaking to me that way and treating me like that. What else? When is this going to stop? My head was full and my heart was broken and I was really struggling. I was suicidal at that point.” West went into crisis accommodation and sought mental health assistance. It was a lead from her psychiatrist that helped her find permanent, secure housing, within a retirement village. West said she had problems with drugs and alcohol when she was bringing up her children and while that was in the past, last year she fell into problem gambling as a way to deal with her feelings of loneliness. She got through that with support from Gamblers Anonymous and her sister. “I don’t mind being alone, what I don’t like is being lonely, and there is a huge difference,” West said. West said she was doing a lot better now and wanted to tell her story in full to help other people. “There’s no point being halfway honest because that doesn’t help anyone,” she said.
A young family has been caught on CCTV breaking into an Airbnb, seemingly just for a roof over their heads, highlighting the brutal reality of WA’s rental crunch. Adelaide apartment listed for rent for $400 per week with bathroom in the kitchen PerthNow June 28, 2022 https://www.perthnow.com.au/busines...r-week-with-bathroom-in-the-kitchen-c-7324914 A studio apartment with a bathroom (including a toilet) inside a ‘modern’ kitchen listed to rent for $400 has exposed the depth of Australia’s rental crisis. The inner-city Adeliade property is one of seven apartments on the O’Connell street block for rent. “Just bring your clothes and move into this gorgeous property in the heart of prestigious North Adelaide,” the listing says. “This spacious, fully-furnished upstairs studio offers the lifestyle that everyone deserves.” The 35 square metre apartment has a kitchen with no stove, a bar fridge, no laundry, and of course the feature — a clear glass bathroom smack bang in the middle of the kitchen including a shower and toilet. Credit: realestate.com.au/realestate.com.au The 35 square metre apartment has a kitchen with no stove, a bar fridge, no laundry, and of course the feature — a clear glass bathroom smack bang in the middle of the kitchen including a shower and toilet. Talk about dinner and a show! It could be yours for just $400 a week. Real estate agent Rachel Lawrie told the ABC the listing was “relatively cheaper” than other one-bedroom apartments in the current rental maker. “It was converted from an Airbnb to help people struggling to get into Adelaide’s rental market,” she said. The listing was no longer online on Tuesday morning. It comes after news of a young Perth family breaking into an Airbnb, seemingly just for a roof over their heads, highlighting the brutal reality of WA’s rental crunch. They’re house-hopping in the middle of the night in the State’s South West, bathing their children and even washing their clothes. Then before the sun rises, the family disappear again after grabbing a blanket and basic pantry staples before they go. “I think there are a lot of desperate people at the moment,” Davinia Gillard, who manages the Airbnb, told 7NEWS on Monday night. “They’re breaking into Airbnbs to give them some shelter for the night.” Housing crisisAirbnb break-ins on rise as desperate families seek shelter The family did not touch expensive electronics inside the Busselton property. Ms Gillard operates 80 short-stay accommodation properties across the State and says there have been four instances of desperate people squatting in them in the past week alone. Each time, similar items such as bedding and pillows have been taken. WA’s vacancy rate is currently hovering around one per cent. Other holiday home operators have shared similar stories with 7NEWS.
Census finding of 1 million vacant properties amid housing crisis an 'enormous policy oversight', demographer says By Loretta Lohberger Posted 4 hours ago https://www.abc.net.au/news/2022-06...ty-houses-amid-affordability-crisis/101190794 Many Australians were in lockdown on census night in 2021.(ABC News: Patrick Stone) An "enormous chunk" of Australia's housing stock is unoccupied, and "something must be done" about it, a demographer says. Key points: Census data shows 1 million dwellings were unoccupied on census night Demographer Liz Allen says many homes are being left vacant while so many people are in need of homes and secure housing There are renewed calls for policy settings to change to discourage people from leaving a property vacant According to figures from the 2021 census, 1 million Australian homes — 10 per cent of the housing stock — were unoccupied on census night last August. In 2016, the number of unoccupied dwellings was about the same but accounted for 11 per cent of the housing stock. "The fact that people are not living in these homes is an enormous oversight from a policy perspective, particularly when housing affordability and homelessness is such an issue in Australia," demographer Liz Allen, from the Australian National University, said. "An unoccupied dwelling can be determined as such due to a number of reasons, primarily due to the property being a holiday home, a subsequent property of someone's perhaps, and an investment property. "Where possible, the Australian Bureau of Statistics (ABS) takes quite a substantial range of methods to ensure that it calculates the usual residents of an area … so we can say with great confidence that the unoccupied dwellings are in fact largely potentially an option for housing for people who are in need of secure housing." Liz Allen says she is confident the unoccupied dwellings identified in the census are potential housing options for people struggling to find accommodation.(ABC News: Mark Moore) The ABS said it had a 96.1 per cent dwelling response rate for the 2021 Census. "The overwhelming majority of Australians this census, for the first time, were at home — not surprisingly, given that the majority of Australians were in lockdown at the time of the 2021 census," Dr Allen said. There has been a drop in the percentage of homes sitting empty compared with the 2016 figure in all states and territories, even though the number of unoccupied dwellings actually rose in NSW and Victoria. The jurisdiction with the greatest proportion of unoccupied dwellings was the Northern Territory with 12.8 per cent (down from 14.1 per cent in 2016), followed by Tasmania with almost 11.8 per cent (down from 14 per cent in 2016) and Victoria with 11.1 per cent (down from 11.7 per cent in 2016). The jurisdiction with the smallest proportion of unoccupied dwellings was the ACT with 6.6 per cent (down from 8.1 per cent in 2016). The other states had figures around 9 and 10 per cent. Fewer Airbnbs amid pandemic One possible explanation for some of that drop could be the decline in properties listed on the short-stay accommodation website Airbnb. University of Queensland geographer Thomas Sigler said there were 330,000 properties in Australia available for one night or more in 2019, about 70 per cent of those were entire properties to rent. By 2021, there were 231,000 properties listed for one night or more. Dr Sigler said, however, there were many reasons why a property might be vacant. National Shelter chief executive Emma Greenhalgh said more analysis was needed of the census figures to better understand the reasons. Principal solicitor at the Tenants' Union of Tasmania, Ben Bartl, said there were "good reasons" why properties may have been deemed vacant by the census. Ben Bartl says some Tasmanian properties have been sitting empty for more than three years.(ABC News: Luke Bowden) "People may be in hospital, they may be on a business trip, they may have been staying at their partner's house, so just because a property's empty doesn't mean it's genuinely empty," Mr Bartl said. The Tenants' Union is, however, concerned about the number of vacant homes. It has used data from water authority TasWater to show that there were about 2,000 properties in the state that had been empty for three years. Mr Bartl said those properties were not being used for short-term rentals. Vacant property tax? Dr Allen said policy change was needed to discourage properties from being left vacant. "The policy settings support housing as a wealth creation and for people to own multiple properties," she said. "There's a lot of theoretical considerations when it comes to the taxation of properties that are left vacant … the issue is that we have so many homes that are being left vacant while so many are in need of homes and secure housing." The Greens want to see a levy imposed on vacant properties.(ABC News: Loretta Lohberger) The Australian Greens want three main changes to housing policy: a levy on vacant properties, phasing out negative gearing and capital gains, and building more public and affordable housing. "At the end of the day, right now, the housing market is treating homes as a speculative commodity for investors to make a buck on when it should be treated as a place for someone to call home," Greens' housing spokesman Max Chandler-Mather said. A tax on vacant residential properties in Melbourne was introduced in 2017. Federal Labor in 2017 supported a tax on vacant properties, but Housing Minister Julie Collins did not clarify whether the party still held such a policy. "The Albanese government has a strong set of policies that we took to the election to help address these challenges and we are already working hard to fill these commitments," Ms Collins said. The ACT has the smallest proportion of unoccupied dwellings at 6.6 per cent.(Giulio Saggin, file photo: ABC News) "These policies include implementing a new national housing and homelessness plan. "In addition, the Housing Australia Future Fund will build 30,000 social and affordable housing properties nationally in its first five years." Federal Labor also previously had policies to limit negative gearing but abandoned those policies last year. According to New Zealand's 2018 census, 10.3 per cent of its housing stock was unoccupied. A 2021 analysis by money.co.uk estimated 8.7 per cent of Canadian houses were unoccupied. In England in 2019, 2.7 per cent of houses were unoccupied, according to the Housing, Communities and Local Government Ministry.