The worst election campaign in history: voodoo economics hits the housing market The sooner May 3 arrives the better, because at least then the politicians will have run out of time to dream up hairbrained expensive proposals. Dutton known as Potato Head.
Australian house prices: Why are they so high? Australia's looming election brings housing crisis into focus https://www.bbc.com/news/articles/cq5wlevy647o
Never ending Australian political bullshit.... Analysis Albanese dodges tough questions on his housing policy When asked one of the most uncomfortable questions in Australian politics, the prime minister kept his response deliberately vague. Michael Read Economics correspondent Apr 14, 2025 https://www.afr.com/policy/economy/...estions-on-his-housing-policy-20250414-p5lrjx It is one of the most uncomfortable questions in Australian politics: Do you think house prices should fall? Say yes, and you sound like you’re threatening the wellbeing of the two-thirds of Australians who own their home. Say no, and it looks like your professed concern about affordability is not genuine. Prime Minister Anthony Albanese in Adelaide on Monday with Housing Minister Clare O’Neil and South Australian Premier Peter Malinauskas. Alex Ellinghausen And so it was on Monday that when Prime Minister Anthony Albanese was asked this very question, he kept it deliberately vague. “Look, historically in Australia … prices tend to rise. What we want to do is to make sure that people have accessibility for home ownership,” he told reporters at a residential development site in Adelaide. That term – accessibility – has become a catch-all for the galaxy of superficially attractive state and federal government schemes that directly put money in the pockets of prospective first home buyers in the form of grants and stamp duty subsidies. For politicians, the measures give the veneer that they are helping solve the wickedly complex problem of housing affordability. But while the policies may sound nice to young voters desperate to break into the housing market, research has consistently shown the extra cash simply pumps up house prices, helping no one in the long run. Not fazed by this, and desperate to win over young voters, Albanese and Opposition Leader Peter Dutton on Sunday announced the latest additions to the genre. In Albanese’s case, it was that Labor would allow almost every prospective first home buyer to get into the housing market with just a 5 per cent deposit. For Dutton, it was revealing that most first home buyers would be able to deduct the interest on the first $650,000 of their mortgage if they purchase a newly built property. Combined with Dutton’s pledge to spend $10 billion on a temporary $1200 tax offset almost universally loathed by economists, yesterday’s two campaign launches may well be remembered as a black-letter day for policy wonks. Not that this was evident from Albanese’s rejection of scathing criticism from economists. Veteran budget watcher Chris Richardson labelled Labor and the Coalition’s offerings “a dumpster fire of dumb stuff”, while leading economist Saul Eslake bemoaned the bipartisan consensus to push up house prices. Pressed by media for his response, Albanese skirted around defending the 5 per cent deposit policy on its merits. Instead, he invited Richardson to visit the development site in Adelaide, as though seeing a home under construction would prompt the economist to have a Damascene conversion on the benefits of pump priming first home buyers. And as for how the deficit-ridden budget can afford the tsunami of spending promises? Albanese insisted he was more economically responsible than Dutton, pointing to $95 billion in savings measures identified by the government. If Albanese wins, he is going to need to find a lot more than that to cover the cost of what economist Richard Holden has labelled one of the most fiscally reckless campaigns in living memory. But with budget management no longer a vote-winner, don’t expect to hear what those savings will be, if they even exist at all.
That's is the real political problem. "Look, historically in Australia … prices tend to rise" So the solution is to add kerosene to the fire. Too many homeowners that vote so you will never get a real solution to the problem. Adding supply lowers the value of the current homes unless you build in areas where no one lives or is underdeveloped. Here in California, USA they have the same issues exasperated by a 1979 proposition that passed which freezes property tax increases by 2%/yr (aka Prop 13). So you have people living Palo Alto (home of Stanford University) who live in $5 million homes paying $500/yr in taxes because they bought it for pennies in the 1970s. Meanwhile their neighbors are paying $100K in taxes. So there is no incentive to sell and thus no inventory to sell. And of course you can't build anywhere since the environmentalists have deemed everything in California endangered & a historical landmark. It's just a homeowner protection racket but the idiots here in California eat it up like lapdogs they are.
Greens' pull out giant novelty cheque from Dutton and Albanese https://www.abc.net.au/news/2025-04-17/federal-live-2025-campaign-election-updates-/105185416 (Supplied: Australian Greens') Adam Bandt says that both major parties housing policies are a "dumpster fire" as his colleagues held up a giant fake novelty cheque. The cheque for $180 billion says "to wealth property investors" from "Anthony Albanese and Peter Dutton". It's all about an analysis the Greens' released today requested from the Parliamentary Budget office that they say shows the cost of negative gearing and capital gains tax discounts will skyrocket to $180.5b over the next 10 years (2026-27 to 2035-36). Housing spokesman Max Chandler Mather says: “Labor and Liberals are putting $180 billion into the pockets of wealthy property investors and banks, and renters and first home buyers are the losers," he says. “Renters are powerful at this election. "By voting Greens, you can keep Dutton out and push Labor to reform negative gearing and the capital gains tax discount and finally start to truly tackle this housing crisis."
Labor and Liberals, full of old men politicians who are cosy with doing nothing except duck and weave.
The same old, same old....... while useless politicians who create the problems blame every other circumstance but themselves. Illustration: Henri Campeã How Australia’s Housing Market Became So Out Of Reach Ballooning property prices and rents are causing serious housing affordability problems in Australia. So how bad is it? And how did it get to this point? By Swati Pandey and Haidi Lun April 16, 2025 Australian homes are among the most expensive in the developed world. Buyers, desperate to get onto the property ladder, are taking on more debt than ever before, and uninhabitable properties, some covered in mold and asbestos, are being snapped up for millions. Australia’s housing crisis has been years in the making. Nationwide home prices are higher than ever, rents are at record levels, and homelessness is rising, making housing a hot-button issue for many Australians who are gearing up to vote in the May 3 federal election. In as many as 120 of the 150 electoral divisions, at least 33% of households say they are experiencing mortgage or rental stress, according to a survey by Digital Finance Analytics. Mortgage or rental stress is defined in the survey in cashflow terms as a situation where a household’s expenses exceed its income. Where Voters Are Feeling the Housing Pinch Majority of households in almost a third of electorates are under housing-related stress Percentage of households under mortgage or rental stress 30 40 50 60 70% NORTHERN TERRITORY QUEENSLAND WESTERN AUSTRALIA SOUTH AUSTRALIA NEW SOUTH WALES ACT VICTORIA Solomon Greenway TASMANIA 20 30 40 50 60 70 80 Source: Digital Finance Analytics Note: Based on 52,000 sample survey to February 2025. In 35 of these “stressed” electorates, the two main political parties are in such tight competition that the election results in those areas could swing easily in either direction. When both major parties, the center-left Labor party and center-right Liberal-National Coalition, formally launched their election campaigns on April 13, new housing policies took center stage. Here’s what you need to know. Dilapidated properties often attract a lot of interest and sell for millions.Photographer: Brent Lewin/Bloomberg What’s happening in Australia’s property market In Sydney, the average home costs almost 14 times the annual disposable income, making it the world’s second-most expensive city to buy property after Hong Kong, according to data from Demographia. Separate figures from property consultancy CoreLogic show the median property price in Sydney hit a record high ofA$1.19 million ($760,000) in March. Saturday morning auctions are somewhat of a spectator sport, with large crowds often in attendance to get a gauge of the property market. Often dilapidated properties on small plots of land attract the most frenzied bidding, with builders paying a premium for the opportunity to redevelop a well-positioned site. One such property, a moldy, abandoned terrace on just 101m2 of land, sold in March for A$2.8 million — A$700,000 above what the owners were prepared to accept — after 22 people registered to bid at auction. The real estate agent estimated the home would require at least A$600,000 worth of repairs. It’s not just Sydney that’s expensive.Home prices in Brisbane, Adelaide and Perth — three of the country’s other seven major cities — have surged between 70% and 75% over the past five yearsto reach record levels. In that time, prices nationwide have increased by 40% while the country’s inflation-adjusted net disposable income has risen a mere 13%. Sydney Homes Are World's Second-Least Affordable Highest median price/income multiples among metropolitan markets Prices have surged so much that it now takes the average Australian buyer around 10 years to save a 20% deposit for an average-priced home, compared with 4.7 years in 2010, government data show. And even with that deposit, only 13% of the homes sold in 2022–23 were affordable for a median income household, according to property consultancy PropTrack. It defines an affordable home as one that a household can purchase and repay the mortgage, with repayments not exceeding 25% of their gross income. Others, who can, are increasingly relying on their parents — the so-called bank of mum and dad — for substantial financial help, or taking out bigger loans from the bank. Australians are among the most heavily indebted in the developed world with household debt as a share of net disposable income at 216.9%. That compares with 137% in the UK and 103.6% in the US. The indebtedness also explains the high degree of financial stress across the country. The problem was exacerbated at the height of the Covid-19 pandemic, when a new generation of homebuyers overstretched themselves financially, bidding up the price of properties during virtual Zoom auctions while the benchmark interest rate was at a record-low 0.1%. Despite indicating that borrowing costs would remain low for several years, the central bank not long after increased interest rates consecutively 10 times. Home Ownership Rate in Australia Has Fallen Sharply Most countries have seen a shallower decline Latest 2006 6469 74 AustraliaUSUKCanadaNew ZealandSweden Source: IMF, OECD, Office for National Statistics, Australian Bureau of Statistics, IBISWorld, Statistics Canada Overall home ownership is in decline. It slipped to 50% for those aged 30 to 34 in the latest census, in 2021, down from 64% in 1971. The share of homeowners among people nearing retirement has gradually decreased, too, census data analyzed by the Australian Institute of Health and Welfare show. Renters are also suffering The situation is not any better in the rental market. On Saturday mornings, long queues often form outside properties, as prospective tenants wait for their turn to inspect the limited accommodation options available. The national vacancy rate — the percentage of available properties for rent — is just 1.3%, according to property insights group SQM Research. That’s well below the 3% “equilibrium” rate that makes for a balanced market. As a result, rental affordability in February hit its worst level since at least 2008, according to an index by property consultancy Real Estate Group. A household earning the median income of A$116,000 could afford just 36% of rentals advertised over July-December 2024, based on rent comprising 25% or less of their pre-tax income. Homelessness is also on the rise, with a 22% increase in people experiencing rough sleeping in the three years to 2023-24. Government-subsidized rental housing isn’t keeping up with demand, declining as a share of the housing stock for three decades to 3.8% in 2021, from 5.6% in 1991. So, what is causing the problem? Prime Minister Anthony Albanese’s Labor Party remains committed to its target to build 1.2 million homes by the end of this decade.Photographer: Brendon Thorne/Bloomberg Australia isn’t building enough homes The single biggest reason for the affordability crisis is that Australia hasn’t been building enough homes to keep pace with the increase in population, which is growing at an annual clip of 2.1%, among the fastest rates in the developed world. In Canada, the UK and the US, populations expanded at just under 1% in 2024. As of 2022, Australia had 403 homes per 1,000 people compared with Italy’s 557, Japan’s 476 and the UK’s 430, according to data from the Organization for Economic Cooperation and Development. Australia saw record levels of immigration when it reopened its borders in 2022 following lockdowns during the peak of the Covid-19 crisis. And that laid bare the country’s poor supply of housing. The country needs to build an average of 240,000 new homes per year in order to achieve a government target of 1.2 million homes by 2029. However, at the current rate of building approvals, the country will fall short by 325,000 homes, according to an estimate by construction industry group Master Builders Australia. There are several reasons why supply isn’t keeping up with demand. Population Growth Outpaces Housing Supply Population growth Increase in housing stock 012 3 % 20002010202019902024 Source: Australian Bureau of Statistics, Reserve Bank of Australia Firstly, Australia’s planning approval systems are too complex and too slow, according to the National Housing Supply and Affordability Council. A recent report by the government’s Productivity Commission also found that the regulatory burden on the sector is increasing with no clear list of regulations that a developer or a builder must comply with, adding to development and construction costs. A shortage of building materials and labor over the past few years has exacerbated the supply problem. Delays in the shipment of building materials during the Covid-19 emergency not only slowed construction but also caused the cost of materials to rise significantly. This drove construction prices to levels that were more than 30% higher in 2024 compared with 2020 and led levels of insolvencies among builders and developers that were almost 90% above the average of the past 10 years. The Australian Bureau of Statistics estimates that the nation’s construction labor productivity rose by just 0.2% per annum in the 30 years to 2023. By comparison, the figure was 1.3% for manufacturing. Opposition to development by local residents — NIMBYism (which stands for Not In My Back Yard) — is also adding to housing delays. In Australia, highly urbanized populations live in unusually high levels of detached housing, making it an outlier in the developed world. That makes Australians, generally, loathto embrace apartment development, at least in their own neighborhoods. This is despite a growing need for smaller homes to account for more, but smaller, households. Potential tenants visit an apartment unit for property inspection in Sydney.Photographer: Brent Lewin/Bloomberg A tax system that exacerbates the problem Economists say that two controversial tax settings that make it very attractive for investors to buy property are also fueling property prices. First, so-called negative gearing rules allow people to invest in property to claim losses associated with the asset, including interest expenses, as deductions. The deductions can make it worthwhile for a landlord to own a rental property that doesn’t produce sufficient income to cover costs, especially if there’s an expectation that it will eventually be worth more than what the investor bought it for. The other tax concession is a discount on the capital gains tax that reduces the amount investors are charged by the government when they sell a home. Both of these tax settings encourage speculative investment in the housing market, which boosts competition for already-limited stock while doing little to encourage new development, according to public policy think tank the Grattan Institute. These tax policies are not unique to Australia, but while countries such as Canada, the UK, the US, Germany and Japan all allow similar tax deductions for rental losses, the Australian approach is seen as more generous than most comparable jurisdictions. For example, in the US and the UK, rental property expenses cannot be claimed against other unrelated income, such as wages or salaries. In Canada, only cash expenses and not depreciation can be claimed. Prices have surged so much that it now takes the average Australian buyer around 10 years to save a 20% deposit for an average-priced home.Photographer: Ian Waldie/Bloomberg The most recent tax statistics from 2021-22 show that nearly 2.3 million Australians declared rental income — a good indication of the number of investors — which equates to roughly 15% of taxpayers. That number has jumped by around one million since 2000. Attempts to reform these policies have historically been viewed as electoral self-destruction. The last time a politician tried to take tax reforms to an election was Labor leader Bill Shorten in 2019 and he suffered a huge loss at the polls. What the major parties are promising Housing is at the center of the two major parties’ election pitches, and the left-wing Greens, who could be critical players in what’s shaping up to be a tight election, have their own housing platform. Labor Party: Prime Minister Anthony Albanese’s Labor Party, if re-elected, says it will open up the existing Home Guarantee Scheme to allow all first-time home buyers to purchase a home with as little as a 5% deposit, without lenders’ mortgage insurance (which is normally required on a loan of more than 80% of the purchase price). The scheme is currently available to first-home buyers who earn less than A$125,000 annually. Already planned to begin later this year is a shared-equity scheme, in which the Labor government promises to co-buy as many as 40,000 properties with first-home buyers over a four-year period. Labor has increased the income eligibility cap to A$100,000 for singles and A$160,000 for couples. It has also increased the price eligibility cap for properties in individual cities, such as A$1.3 million in Sydney and A$950,000 in Melbourne. Also newly announced is a promise to build 100,000 homes — at a cost of A$10 billion — specifically reserved for first-home buyers. Labor remains committed to its target to build 1.2 million homes by the end of this decade and its A$10 billion investment vehicle called the Australia Housing Future Fund to help deliver affordable homes. Liberal-National Coalition: Peter DuttonPhotographer: Brendon Thorne/Bloomberg Peter Dutton, leader of the opposition center-right Liberal-National Coalition, says if elected he would allowfirst-time home buyers who purchase a newly built home to deduct their interest payments on up to A$650,000 of their mortgages from their taxes for five years. Single people earning under A$175,000 and couples earning less than A$250,000 would be eligible. The coalition announced it would also expand the Home Guarantee Scheme by lifting the income eligibility cap significantly to A$175,000 for singles and A$250,000 for couples. The bloc has said that first-home buyers would also be able to access up to A$50,000 from their pension funds to put together the initial deposit for a home. It also promises to allocate A$5 billion toward essential infrastructure such as water, power and sewerage in new housing developments. The Greens: The Greens’ housing policy includes abolishing negative gearing and the capital gains tax discount on new property purchases, and grandfathering these tax breaks already in use to limit them to one property per person. They also want a government-owned developer to build more public housing and to limit rental increases to 2% every two years.